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The current assessments – Aluminium P1020 cif South Korea and Aluminium P1020 fca South Korea – include both duty-free and non-duty free aluminium.
Metal Bulletin proposes to only include in both assessments aluminium which can be imported into South Korea duty-free under free-trade agreements (FTAs).
If the proposal is adopted, the assessments will be renamed Aluminium P1020, duty-free, cif main South Korean ports and Aluminium P1020, duty-free, fca South Korea.
All historical data related to both assessments prior to their amendments will remain available in the pricing section of the Metal Bulletin website and in the FastMarkets historic data section.
Duty-free aluminium in South Korea is aluminium that is imported into the country free of the country’s 1% import tax due to FTAs.
South Korea has FTAs with several aluminium-producing countries, including India, Australia, Canada, New Zealand, Malaysia and Indonesia.
The proposed change is to reflect industry feedback that duty-free aluminium is strongly preferred over non-duty free aluminium in South Korea. This is evident from duty-free aluminium accounting for around 70-90% of the aluminium imported into South Korea, according to market participants.
In 2017, imports from Australia, India, Canada, Malaysia, Indonesia and New Zealand accounted for around 80% of all South Korean aluminium imports, which totalled 1.14 million in 2017 according to data from the Korea International Trade Association.
India was the largest exporter of aluminium to South Korea, supplying 385,816 tonnes, or 34%, of the total, followed by Australia, which shipped 318,656 tonnes, or 28% of the total.
The exclusion of non-duty free aluminium from the assessment will more accurately reflect the premiums of the most dominant form of aluminium imports into South Korea.
The consultation period for this proposed amendment will end one month from the date of this pricing notice on April 9, 2018, with the proposed changes taking place from April 10, 2018, subject to market feedback.
To provide feedback on this proposal or if you would like to provide price information by becoming a data submitter to this price, please contact Vivian Teo by email at: pricing@metalbulletin.com. Please add the subject heading FAO: Vivian Teo, re: duty-free aluminium premium in South Korea.
To see all Metal Bulletin’s pricing methodology and specification documents go to https://www.metalbulletin.com/prices/pricing-methodology.html