SHANGHAI, Dec. 23 (SMM) -- China imported 21,836 mt of aluminum during November, up 126% from October. SMM believes the rising SHFE/LME aluminum price ratio was responsible for soaring imports of aluminum during November.
The average SHFE/LME aluminum price ratio was 7.46 during October, but has risen to 7.62 in November. Meanwhile, import premiums for aluminum ingot from LME warehouses located in South Korea or Singapore were generally between USD 110-130/mt, further highlighting the price advantage of imported primary aluminum, with imported aluminum ingot prices even lower than domestic prices over some period of time. As a result, domestic enterprises’ willingness to import aluminum was greatly stimulated. As the SHFE/LME aluminum price ratio climbed further, some downstream processors also considered exporting goods via the processing trade, which further pushed up total imports of aluminum in November.
As the SHFE/LME aluminum price ratio remains high currently, more domestic enterprises consider increasing imports of primary aluminum. In this context, SMM predicts China’s imports of primary aluminum in December will likely grow further.