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The K-means algorithm is very popular in the machine learning community due to its inherent simplicity. However, in its basic form, it is not suitable for use in problems which contain periodic attributes, such as oscillator phase, hour of day or directional heading. A commonly used technique of trigonometrically encoding periodic input attributes to artificially generate the required topology introduces a systematic error. In this paper, a metric which induces a conceptually correct topology for periodic attributes is embedded into the K-means algorithm. This requires solving a non-convex minimization problem in the maximization step. Results of numerical experiments comparing the proposed algorithm to K-means with trigonometric encoding on synthetically generated data are reported. The advantage of using the proposed K-means algorithm is also shown on a real example using gas load data to build simple predictive models. [ABSTRACT FROM AUTHOR]