The text below is an edited version of an Insight originally published on CRU Online, dated 16 April 2026. For the full version, contact us here.
The Main Japanese Port quarterly price has been used as the principal benchmark for aluminium contracts across Asia for many years. However, nearly all market participants question its relevance in today’s market, given the evolution of production and trade in the region. In this analysis, we explain why the MJP quarterly number no longer reflects the reality of the market and introduce our new aluminium indices in Asia as an alternative to the MJP quarterly pricing system.
Why MJP is no longer reflective of the market
The Main Japanese Port quarterly aluminium premium has been in place for decades to determine premiums over the LME cash price. Data tracking these premiums by CRU dates back to 1999. Today, there is broad consensus among market participants that the MJP quarterly system is no longer relevant to the market, for several reasons.
The quarterly negotiations are no longer balanced. Previously, most major producers participated in quarterly negotiations. However, that number has dwindled, meaning the negotiations no longer reflect the market. This is evident in the quarterly MJP premium, which often settles at a higher level than spot premiums.
Japan is also no longer leading demand growth in the region. The latest data covering shipments of rolled products and extrusions shows that the Japanese market has been in contraction over recent years. In contrast, demand from India, Vietnam and Indonesia has been buoyant, and this trend is expected to accelerate in the next decade.
Furthermore, the influence of Japanese demand has been declining in absolute terms. The brighter blue part of the chart shows Japan’s absolute consumption, and it is shrinking. The steady decline in Japan’s share of total primary demand outside China is clear.
MJP also reflects trade flow patterns that are increasingly narrow in scope. Many market contacts argue that the quarterly premium primarily reflects trades between Japan and Australia. With Australia such a dominant supplier to Japan, and Indonesia emerging as a leading producer, MJP can no longer be reflective of the wider Asian market.
Finally, MJP fails on liquidity and transparency. We believe both the quarterly and spot MJP are no longer valid proposals for an Asian benchmark due to their lack of liquidity. A benchmark needs to be highly liquid and influenced by a wide range of market participants. MJP can no longer fulfil those requirements.
The CIF Asia benchmark will better reflect ongoing consumption growth
Asia has become the leading region for primary growth consumption. Countries like India and Indonesia are recording strong demand growth, something that has not happened in Japan, Europe and North America for many years.
We strongly believe the next benchmark for Asia needs to reflect transactions from countries that have large and growing consumption markets, not Japan alone.
The CIF Asia price offers accurate representation of the spot market
In response to this market shift, CRU will be launching a new weekly CIF Asia price. The price will be derived from transactions, bids, offers and opinions from the main Asian ports. Transaction data will remain the most important input to ensure an accurate reflection of the spot market. The inclusion of other price types, where it enhances liquidity without compromising accuracy, is also permissible under our Group Compliance Framework.
The main ports included in the CIF Asia price will be:
- Incheon in South Korea
- Port Klang in Malaysia
- Ho Chi Minh in Vietnam
- Laem Chabang in Thailand
- Kaohsiung in Taiwan, China
The final weekly premium will be determined from accepted price submissions, with transactions weighted most heavily and bids, offers and opinions used as supporting inputs. The final price for Asia CIF will be an average of the prices for the five main Asian ports listed above, with each assessed individually and visible on our website for additional transparency.
CIF Asia serves as a new base for other derived prices
Our Asia CIF price will serve as the central price for the region, from which we can derive other prices. Given the growing importance of Indonesia as a supplier in the region, we will also be introducing an Indonesia FOB price.
The new series will provide a more practical basis for market participants looking for a benchmark that reflects current trade flows, supply patterns and regional demand growth. Market feedback is critical when launching new prices, and we will proactively be reaching out to market participants to discuss this proposal.
Please get in touch to discuss our approach, proposed methodology, and specifications.
