"Local aluminium import premiums for first quarter shipment are expected to settle at $43-$47 a tonne, compared with about $52 a tonne for the current quarter," said a senior trader with a Seoul-based foreign firm.

The South Korean premiums have fallen from the previous expectation of $45-$50 a tonne several weeks ago, traders said.

But the senior trader said the premiums for the first quarter may rise $1-$2 a tonne from the new level if local buyers need financing from foreign suppliers.

The fall in the first quarter premiums was mainly due to poor local demand due to the country's economic slowdown and in line with a decline in the Japanese premiums, he said.

He said the Japanese premiums for the first quarter were settled at $37-$38 a tonne over the London Metal Exchange(LME) monthly cash average.

Local importers, such as aluminium rolling mills and extrusion makers, were expected to conclude their negotiations for the premiums with foreign suppliers at the end of this week or early next week, traders said.

Meanwhile, aluminium premiums for spot delivery were still trading at above $50 a tonne in the local market as local importers have experienced slight shortages of the metal, traders said.

They said the premiums for spot delivery were traded at above $55 a tonne in November after importers curtailed their running stocks under the economic troubles, which have seen them worry about costs and made it difficult to get financing from local banks.

Sales by the government procurement body, the Supply Administration of South Korea (SAROK), had also made importers reluctant to carry large stocks and to strike deals with foreign suppliers for the fourth quarter, they said.

But another trader said some local firms preferred to import rather than to buy the metal fromSAROK as its sale prices have recently lost their attractiveness due to the won's strength against the dollar and weak LME prices.

SAROK has been selling stockpiles on friendly credit terms to help local firms during the country's economic crisis.

South Korea's primary aluminium ingot imports fell to 452,965 tonnes in the first 10 months of 1998 from 658,886 tonnes in the same period of 1997, data by the Korea Trade Information Service showed.

Imports from Australia totalled 136,547 tonnes in the period, followed by South Africa with 72,743 tonnes, Russia with 65,019 tonnes and New Zealand with 49,675 tonnes, it showed.

This compared to 182,042 tonnes imported from Australia in all of 1997, 166,533 tonnes from South Africa, 98,246 tonnes from Russia and 50,898 tonnes from New Zealand, the data showed.