In April, China's primary aluminium imports continued to suffer significant losses, with the total import volume through general trade being lower than 100,000 mt

According to customs data, in April 2024, domestic imports of primary aluminium decreased by 12.38% MoM to 218,500 mt, up 119% YoY; exports in April were approximately 12,200 mt, up 197.86% YoY; net imports in April 2024 reached 206,300 mt, up 115.2% YoY.

From January to April 2024, the cumulative domestic import volume of primary aluminium was 939,900 mt, up 192% YoY; the cumulative domestic export volume was 14,400 mt, up 10.41% YoY; the cumulative net import volume was 925,500 mt, up 199.5% YoY. (The above import and export data are based on HS codes 76011090, 76011010).

In April 2024, aluminum import business was unprofitable. Starting from mid to late April, the import loss expanded significantly, reaching a peak of 3,122.2 yuan/mt. By the end of April, the loss somewhat narrowed but still remained above 1,500 yuan/mt. In April, primary aluminum imports saw significant losses, with import volume down 12.38%, export volume up 926.81% MoM or 197.86% YoY. Although the import volume remained relatively high at 218,500 mt, the total amount of primary aluminum imported through general trade declined significantly and were mainly under long-term orders. The actual amount of imported primary aluminum entering the Chinese market has been relatively limited, reducing the impact on the domestic market.

Import Analysis:

From the perspective of import source countries, the main sources of primary aluminium imports in April were Russia, India, China, Indonesia, and Malaysia. The total import volume of primary aluminium from Russia was approximately 107,200 mt, accounting for 49.05% of the total imports, remaining as the main source of China's primary aluminium imports, up 20.63% YoY. However, due to the closure of the import window, the import volume decreased by 7.31% MoM. Considering some long-term contract deliveries, the import volume from Russia still exceeded 100,000 mt. The total import volume from China was 32,100 mt, accounting for 14.67%, which were mainly under "export processing" trade model, and primarily consisting of Rusal metal. Imports by country: India (25,100 mt, 11.49%), Indonesia (18,300 mt, 8.37%) and Malaysia (9,400 mt, 4.3%).

From the perspective of trade methods, although primary aluminium imports in April 2024 still mainly flowed in through general trade, their proportion decreased from 56.67% in March to 44.22%, down 12.45 percentage points. This was mainly due to the continuous closure of the primary aluminium import window in April, leading to sustained significant import losses. As a result, some imported primary aluminium was stored in bonded areas and did not actually enter the domestic market for circulation. Consequently, the proportion of primary aluminium entering through bonded supervision locations and logistics goods in special customs supervision areas reached 37.52%. 14.67% were imported under “export processing trade”, 1.12% were imported under feeding processing trade and 2.47% were under tolling trade.

Export Analysis:

Due to the continued closure of the import window in April, some imported sources were re-exported, leading to a significant increase in primary aluminium exports in April. From the perspective of trade models, in April 2024, domestic primary aluminium mainly flowed out through logistics goods in special customs supervision areas, accounting for 99.68%. From the perspective of export destinations, in April 2024, 58.76% of the exported primary aluminium went to South Korea, 38.47% to Taiwan, and 2.46% to Nigeria.

In April, the import window remained closed, and imports continued to incur significant losses. The actual inflow of primary aluminium into the domestic market through general trade significantly dropped to only 96,600 mt. This is a notable decrease compared to the imports through general trade in January (180,000 mt), February (134,500 mt), and March (141,300 mt). The impact on the domestic market has also weakened, somehow reducing the supply pressure. In May, the losses on primary aluminium imports narrowed, but were still above 1,000 yuan/mt. It is expected that the actual import volume of primary aluminium through general trade in May will remain low, with limited impact on the domestic market. Some bonded area sources may seek opportunities for re-export trade. However, considering factors such as long-term contracts, SMM expects that primary aluminium will maintain a net import in 2024, with the monthly net import volume remaining high. Future attention will be on the impact of UK and US sanctions on Rusal and the trade flow of Russian aluminium.