South Korea's PPS buys 2,000 tonnes of aluminium

South Korea’s state-run agency Public Procurement Service (PPS) bought 2,000 tonnes of primary aluminium ingots via tenders on Tuesday February 19.

PPS purchased 1,000 tonnes of western aluminium ingots from Trafigura for a premium of $249.8 per tonne over LME cash price on cif basis, a source familiar with the deal said.

Glencore International sold 1,000 tonnes of non-western material to PPS at a premium of $230 per tonne cif, the source said.

The last PPS tender for aluminium was for around $234-238 per tonne.

PPS bought nickel, tin and copper in tenders last week.

There have been a few spot deals on a cif basis in South Korea at around $230-235, a trader in Seoul told Metal Bulletin.

“Korea has enough [aluminium] stock. There is some speculation of a backwardation in June-July and that’s been a key factor in lowering the premium slightly,” he said.

Other Asian markets have been very quiet ahead of the quarterly Main Japanese Port (MJP) aluminium negotiations that start at the end of February.

Metal Bulletin’s spot MJP premium is at $240-245 per tonne.

Aluminium stocks in main Japanese ports rose 11.1% month-on-month to 315,500 tonnes at the end of January, according to data by trading firm Marubeni.

“We didn’t hear of any [spot] deals,” a Tokyo-based trader said.

The domestic premium for aluminium in Japan is at a discount to the spot MJP premium indicated at $240-245 per tonne.

“We have heard of some traders trying to sell material at $230 or under $230 [per tonne in the domestic market],” a source told Metal Bulletin last week.

The high aluminium inventories at ports could be a problem as sellers try to destock before Japan’s fiscal year ends on March 31.

Premiums in Singapore’s LME warehouses for aluminium ingot held steady at $175-185 per tonne.

“We haven’t seen any deals at the moment,” a Singapore-based trader said, adding that there have been a few offers at $175-185 per tonne.

Under Nalco's alumina tender, which serves as an international benchmark, the company sold 30,000 tonnes of alumina at $357 per tonne fob.