China’s August Imports of Scrap Aluminum Down 23.08% YoY

SHANGHAI, Sept. 14 (SMM) – According to China Customs, China’s imports of scrap aluminum were 200 kt during August, down 10.27% MoM, and down 23.08% YoY. Weaker consumption and higher import costs contributed to lower imports of scrap aluminum during August.

China’s total imports of scrap aluminum from January to August were 1.68 million mt, down 12% YoY. China’s imports of scrap aluminum have fallen significantly since the start of 2011 for two reasons. First, China’s demand for secondary aluminum alloy declined significantly in 3Q as the weather turns hotter and demand becomes weaker, and operating rates at secondary aluminum enterprises fell further below 70%, resulting in weaker consumption of scrap aluminum. As a result, China’s imports of scrap aluminum decreased. Second, although the SHFE/LME aluminum price ratio rose slightly in July, quotations offered by overseas scrap aluminum suppliers remained firm, and they showed little interest in moving goods at lower prices. In the meantime, domestic importers secured thin profits, and rising customs clearance costs further depressed their importing interest, which also caused China’s total imports of scrap aluminum to decline.

In summary, weak consumption was responsible for lower imports of scrap aluminum in August, and SMM predicts imports of scrap aluminum in September will recover as the consumption improves, but any increases will be limited.