[SMM analysis] is there a shortage of domestic waste aluminum to limit the addition of waste aluminum?

In July, six categories of waste aluminium (tariff No. 7602000090) were officially added to the catalogue of solid wastes that can be used as raw materials in the import category, meaning that all imported waste aluminium has become a restricted category. In 2018, the import volume of waste aluminum is 1.56 million tons, and the import volume over there can reach 780000 tons in half a year. It seems to have a great impact. Is there a real shortage of domestic waste aluminum?

There's no shortage. What is missing is the low price cooked aluminum supply, what is not short of is the raw aluminum supply. What are the reasons for this? It needs to be analyzed from the perspective of supply and demand.

In demand, we must first look at the circulation path of waste aluminum. The domestic enterprises that use 80% waste aluminum are mainly recycled cast aluminum alloy manufacturers, which can be used for almost all common waste aluminum, and are generally mixed with raw and cooked aluminum, and prefer to use more raw aluminum because of price reasons. On the other hand, aluminum bars, aluminum plates, aluminum profiles and other aluminum extrusion processing enterprises that use the remaining 20% waste aluminum can only use cooked aluminum, and prefer to use higher quality cooked aluminum, and according to their product types, they mainly use 1-3-5-6 series waste aluminum. At present, the cars downstream of the terminal of recycled cast aluminum alloy enterprises are almost "cool", and almost all of them are cheap raw aluminum, only a small amount of cooked aluminum is used when they have to be added, and because of its poor overall order, the demand for waste aluminum is also reduced compared with the same period last year, so that domestic raw aluminum suppliers are more abundant, and what they lack more is cheap cooked aluminum. And the aluminum downstream extruded material processing enterprises, also found that the cost of waste aluminum has a significantly lower effect, whether aluminum bars, profile enterprises, or aluminum plate enterprises, and even can production enterprises are also looking for the possibility of reclaiming waste cans. As a whole, the purchase quantity of 1-3-5-6 series cooked aluminum has increased obviously, and because of its large output, this part of cooked aluminum can not meet the increasing demand of aluminum bar, profile enterprise, aluminum plate enterprise and even can production enterprise. The whole purchase quantity of 1-3-5-6 series cooked aluminum is obviously increased, and because of its large output, this part of cooked aluminum can not meet the increasing demand. At the same time, because the price of aluminum is still relatively high, the price of cooked aluminum has been high.

Raw aluminum

Looking at the supply side, the changes of general waste aluminum suppliers mainly come from the changes of social old materials and imported materials, and the new materials produced by factory materials do not change much. Social old materials are mainly recovered and enriched by small and scattered freight yards, and then sold to the outside world. Their small and scattered characteristics make many of them less willing in the case of poor downstream demand this year, and even some bosses even travel on holiday. This has led to a reduction in the total supply of waste aluminum, or at least no significant increase in the supply of waste aluminum. On the other hand, most of the imported waste aluminum is raw aluminum, and the importers are almost all recycled cast aluminum alloy enterprises. The price of imported waste aluminum is obviously lower than that in China, but restricted by import restrictions, it can not meet the needs of domestic recycled aluminum enterprises, and the rest is supplemented from China. It is also dominated by the purchase of raw aluminum.

Cooked aluminum

However, in addition to waste aluminum imports, a variety of imported composite ingots have recently begun to sell inquiry prices. According to SMM, this part of the product price does have certain advantages, but at present, most of the products can only be used by recycled casting aluminum alloy enterprises, and then under the background of flat orders, the actual transaction is very limited. However, at present, various traders are also looking for various sources of high-quality goods, and by Friday, 97.5% of the compound ingots with aluminum content have begun to sell and inquire, and it can be predicted that there will be a high probability of the emergence of composite ingots that can be used for aluminum extruded materials.

To sum up, at present, there is a surplus of raw aluminum in the domestic supply, and the reduction caused by the reduction of imported waste aluminum is limited, which only affects the cost of recycled aluminum. The relative shortage of cooked aluminum, especially the increasing demand for waste aluminum from more and more extruded aluminum processing enterprises, will lead to the shortage of cheap cooked aluminum, which may be supplemented by imported complex ingots in the future, but it is still limited. Therefore, in terms of the total amount, the supply of waste aluminum may decrease in the second half of the year, but the supply of raw aluminum is still on the surplus, while the supply of cooked aluminum is relatively scarce.

(Shanghai Nonferrous net is easy to shine)