To understand why everything from a can of beer to an electric vehicle is likely to get pricier, negotiations over aluminum fees in Japan provide a vivid lesson.
Producers of the lightweight metal are increasingly calling the shots in pricing talks with Japanese buyers as demand climbs amid a tightening global market driven by economies recovering from the pandemic. In a dramatic shift from a year ago, customers rushing to secure supply are left with far less haggling power, leading to ever-higher fees.
Buyers in Japan agreed to pay a premium of $185 (about ¥20,240) per ton above benchmark London prices for the coming quarter, the highest in six years, according to five people familiar with the matter. That’s more than double the level seen a year earlier, when demand suffered due to the global coronavirus outbreak.