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After a consultation period, Fastmarkets will launch two aluminium premiums: one for the low-VAT market and another for high-VAT P1020A.
The difference between ingot sold with low- and high-VAT rates has become more pronounced because of additional domestic production capacity that led the government to end a duty-free quota it had introduced in 2014, essentially deeming Brazil self-sufficient in terms of primary aluminum production.
The two new premium assessments will not actually include VAT or any tax other than import duties where applicable. Sales with 12% VAT are intrinsically transacted at lower premiums to compensate for higher taxes, while material with zero or 4% VAT can be sold at higher premiums.
The specifications are:
Aluminium P1020A premium, low-VAT market, delivered São Paulo region, $/tonneQuality: P1020A or 99.7% minimum Al purity (Si 0.10% max, Fe 0.20% max) ingotQuantity: Min 100 tonnesLocation: Delivered in São Paulo region with up to 4% ICMS state tax, duty-paid, VAT removed, premium on top of LME cash pricesTiming: Within 4 weeksUnit: USD/tonnePayment terms: Cash against documents (7 days after bill of lading date); other payment terms normalizedPublication: Once every two weeks. Tuesday, 3-4pm London time
Aluminium P1020A premium, high-VAT market, delivered São Paulo region, $/tonneQuality: P1020A or 99.7% minimum Al purity (Si 0.10% max, Fe 0.20% max) ingotQuantity: Min 100 tonnesLocation: Delivered in São Paulo region with 12% ICMS state tax, duty-paid, VAT removed, premium on top of LME cash pricesTiming: Within 4 weeksUnit: USD/tonnePayment terms: Cash against documents (7 days after bill of lading date); other payment terms normalizedPublication: Once every two weeks. Tuesday, 3-4pm London time
These two new prices will replace the existing MB-AL-0021 aluminium P1020A premium, delivered Sao Paulo region, $/tonne. Its pricing history will still be available on the dashboard.
These prices will be a part of the Fastmarkets base metals package.
To provide feedback on these prices or if you would like to provide price information by becoming a data submitter, please contact Letícia Simionato by email at: pricing@fastmarkets.com. Please add the subject heading “FAO: Letícia Simionato re: Brazilian aluminium premium assessment.”
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To see all Fastmarkets pricing methodology and specification documents, go to https://www.fastmarkets.com/methodology.