SHANGHAI, Jun 21 (SMM) - According to the data released by the General Administration of Customs, in May 2022, China’s primary aluminium import was 37,300 mt, a month-on-month increase of 7.1% and a year-on-year decrease of 61%, while exports were 65,100 mt, a month-on-month increase of 103.1% and a year-on-year increase of 7046.8%. Thus, the net export was 27,800 mt.
From January to May 2022, primary aluminium imports totalled 168,700 mt, a year-on-year decrease of 71%, while exports were 170,000 mt, a year-on-year increase of 4449%. The domestic primary aluminium trade was reversed to a net export of 1,341 mt, a year-on-year decrease of 100%.
The above data covers products under two HS codes: 76011010 and 76011090. In view of the fact that products under HS code 76011010 are mainly high-purity aluminium and have a small market share, SMM mainly analyses import and export under HS code 76011090 (unwrought unalloyed aluminium with aluminium content < 99.95%).
China imported 37,200 mt of ordinary aluminium ingots in May, up 7.6% MoM and down 61.1% YoY.
The aluminium ingot import window was still closed from April to May, with import losses at around 2,600 yuan/mt. As such, the imports of ordinary aluminium ingots rose only slightly in May.
Aluminium ingot imports in May were mainly under general trade. Imports under general trade and tolling trade were 25,000 mt, accounting for 67.1% of the total import volume.
Russia remained China’s main source of ordinary aluminium ingots in May. In May, China’s imports of ordinary aluminium ingots from Russia were 32,700 mt, accounting for 87.9% of the total imports, ranking first. From January to May, China imported 124,400 mt of ordinary aluminium ingots from Russia, accounting for 74.1% of the total imports and up 17.4% YoY.
In May 2022, China exported 64,100 mt of ordinary aluminium ingots, an increase of 103% from the previous month. The total export of ordinary aluminium ingots from January to May reached 166,500 mt. The export window was still closed in theory in May as LME aluminium continued to underperform SHFE aluminium, which coupled with a 15% tariff on primary aluminium exports, should have inhibited primary aluminium exports. However, the actual exports showed a 103% month-on-month growth, which was mainly driven by goods in special customs supervision areas, with a large amount of aluminium ingots being shipped out of bonded areas in Guangdong and Shanghai.
Over 30,000 mt of aluminium ingots were imported every month, while exports were mainly due to the outflows of goods in bonded areas, thus China still maintained net imports of aluminium ingots. China also exported 591,100 mt of aluminium semis in May, up 38.56% YoY, with the growth mainly contributed by aluminium plate/sheet, strip and foil. China exported 2.65 million mt of aluminium semis from January to May, a year-on-year rise of 27%.
Entering June, domestic and overseas aluminium prices fell sharply due to US interest rate hikes and pessimism over US economy. However, with the improvement of the domestic pandemic situation, domestic aluminium ingots have maintained destocking cycle thanks to the recovery of domestic consumption, allowing domestic aluminium prices to fall less sharply than overseas prices. As a result, the SHFE/LME aluminium price ratio went up, helping the import loss of aluminium ingots gradually narrow. The import window is expected to open. In June, aluminium semis export profits fell from a high level. Aluminium plate/sheet, strip and foil companies, whose exports take up the largest share of China’s total aluminium semis exports, reported a decline in overseas orders. As overseas aluminium ingot prices fell deeply, the cost pressure of overseas aluminium processing enterprises was eased, which encouraged them to raise production. Chinese aluminium semis have lost their competitiveness. As such, it is expected that China’s aluminium semis exports may decline month-on-month in June.
