Primary aluminum imports increased by 131.01% YoY in 2023

SHANGHAI, JAN 23 (SMM) –According to customs data, the total import volume of primary aluminum in 2023 was 1.5431 million mt, up by 131.01% YoY; the total export volume was 150,200 mt, down by 23.39% YoY; the total net import volume reached 1.393 million mt, up by 195.10% YoY. The total import volume of primary aluminum in December 2023 was 176,100 mt, up by 37.99% YoY, but down by 9.35% MoM; the total export volume was 14,800 mt, up by 2090.21%, but down by 32.17% MoM; the total net import volume reached 161,300 mt, up by 27.0% YoY but down by 6.45% MoM.

The main import sources of domestic primary aluminum in December 2023 were Russian Federation, India, Indonesia, Iran, Australia and other countries. In December 2023, the imported primary aluminum from the Russian Federation increased by 12.27% MoM, accounting for 68.78% of the total primary aluminum imports; the total imported primary aluminum from countries other than the Russian Federation was approximately 54,700 mt, down by 37.20% MoM. In December, the import volume of primary aluminum from India was 14,000 mt, accounting for 8.01%; other sources include: Indonesia (10,800 mt, accounting for 6.19%); Iran (7,500 mt, accounting for 4.25%); Australia (6,700 mt, accounting for 3.83%). In 2023, 76.45% of China's total imported primary aluminum was contributed by the Russian Federation. The Russian Federation ranks first as the source of China's imported primary aluminum, with India, Iran, Indonesia, and Australia ranking second to fifth. In 2023, due to political and other factors, Russia's aluminum exports will shift more to China. Compared with 2022, the total amount of primary aluminum imported by China from the Russian Federation has increased significantly. In 2023, China imported a total of 1.1757 million mt from the Russian Federation, up by 154.45% from 2022.

From the perspective of trade methods, domestic primary aluminum imports in December 2023 mainly flowed through general trade, with imports accounting for 76% of total primary aluminum imports, up 4 percentage points MoM, while the proportion of logistics goods entering through special customs supervision areas reduced from 25% to 15%. In December 2023, SHFE aluminum spot import window opened longer than in November, and the proportion of primary aluminum flowing into China through general trade has rebounded.

In terms of trade methods, in December 2023, domestic primary aluminum mainly flowed out through special customs supervision areas, accounting for as high as 99.647%. From the perspective of export destination countries, 72.49% of exported primary aluminum arrived in Malaysia in December, and 21.15% was exported to South Korea. Throughout 2023, the vast majority of China's primary aluminum flowed out through special customs supervision areas, mainly exported to South Korea, Malaysia, and Japan. These countries are all relatively close to China, mainly as China's primary aluminum exports have no advantages and the source of exports is mainly imported raw aluminum stored in bonded areas. When the aluminum premiums and discounts in China's neighboring countries improves, we can seize the opportunity to make profits from exports. Therefore, the distance between major export destination countries and China is relatively short, and the transit time is relatively short.

In December 2023, China's aluminum import window opened for more than 20 days. Coupled with the previous import of raw aluminum in transit, the import volume is still considerable. SHFE aluminum prices still outperformed LME aluminum. After the import window was briefly closed in late December 2023, it reopened in early January 2024. As of January 22, SHFE aluminum import profit was nearly 400 yuan. Considering that part of primary aluminum are under long-term orders, it is expected that primary aluminum imports will remain high in January. When demand is weak at the end of the year, we need to be wary of the impact of imported low-priced aluminum ingots on the market.