SHANGHAI, May 22 (SMM) --
According to China Customs, bauxite imports were 1.01 million mt during April, down 49.68% YoY, but up 8.73% MoM. Cumulative imports from January to April fell by 53.14% YoY. The cost disadvantage for imported bauxite has become more obvious since the beginning of 2009 due to continuing declines in profit margins for alumina producers. Meanwhile, a large volume of imported bauxite was piling up at Chinese ports, resulting in a decline in imports. Bauxite imports are expected to remain low, and the self-sufficiency rates for aluminum materials should improve significantly over the next several months.
According to China Customs, alumina imports were 646.2kt during April, up 15.25% YoY, and up 135.61% MoM. Production costs using imported alumina were lower than when using domestic alumina, as domestic alumina prices surged during 1Q, leading to sharp increases in alumina imports. However, large volumes of imported alumina were sold at very low prices from late April to early May due to concerns over future prices, helping moderate domestic prices. Alumina imports are expected to fall during May.
According to China Customs, aluminum imports were 362.4kt during April, up 2,107.08% YoY, the largest increase in recent memory. However, profit margins for imported aluminum experienced significant declines due to the declining SHFE/LME aluminum price ratio. In this context, CBI predicts aluminum imports will experience significant declines beginning in June, and only an estimated 50kt of aluminum imports for processing trade will be found in markets during 3Q (if the SHFE/LME price ratio is still favorable). Finally, imports of aluminum should return to previous levels of 10kt/month or greater.
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