Platts assessed the South Korean primary aluminum premium spot market at $80-$90/mt plus LME cash, CIF Busan, Wednesday for duty unpaid P1020 ingots with a maximum iron content of 0.14%.
The assessment was down $5/mt week on week, and $17.50/mt on the month as high stocks at local warehouses, and a backwardated price curve for October and November continued to deter traders and stockists buying new shipments.
Sources estimated South Korea's warehouse inventories at about 750,000 mt, compared with 600,000 mt a few weeks ago. A trader said he would not rule out stocks reaching 1 million mt by the end of the year.
Consumer demand was thin in the past week due to the Chuseok thanksgiving national holiday, sources said.
Participants were also reluctant to commit to purchases until Japan had wrapped up its term contract negotiations for the fourth quarter.
On Monday, Platts assessed Japan's Q4 contract price at $90/mt plus LME cash CIF main Japanese ports, down from $90-$100/mt for Q3.
South Korea's aluminum market is slightly discounted to Japan because warehouse stocks are rising more rapidly, a producer said.
On Tuesday, a 1,000 mt parcel was reported to have traded between a producer and trader at $85/mt plus LME cash, CIF Busan, for shipment in October from Australia or New Zealand.
A producer reported the sale of three October spot shipments at $80-$90/mt plus LME cash, CIF Busan, comprising 9,000-12,000mt in total, to three consumers.
A South Korean trader reported sales of multiple spot lots comprising 500-1,000 mt each at $80-$85/mt plus LME cash, FCA Busan and Incheon.
South Korea's domestic market has been trading at discounted rates to the seaborne market, participants have said in recent weeks.
Platts South Korean aluminum spot assessment reflects the premium or discount to the LME cash price for P1020A ingots CIF Busan basis, duty-unpaid, for P1020 of any origin, with a typical trade volume of 200 mt to 2,000 mt for loading in the next 30 days.
The specifications are P1020A ingots to meet minimum LME specification, 99.7% Al min, max 0.1% Si, 0.2% Fe, 0.03% zinc, 0.04% gallium, 0.03% vanadium.
The assessment is normalized to reflect metal with a maximum iron content of 0.14%, reflecting dominant trading patterns in Korea.
