China Aluminum Import Data Analysis in May 2012

SHANGHAI, Jul. 2 (SMM) --

Bauxite

Data from China Customs show China’s bauxite imports during May increased 41.2% YoY to 6.274 million mt, while total imports during the January to May period climbed 42.4%, to 24.473 million mt. SMM statistics also reveal that China’s bauxite imports from Indonesia during May were 5.564 million mt, and 20.65 million mt during the January to May period. Imports from Australia by comparison were 710,000 mt during May and 3.605 million mt from January to May.

SMM attributes the surge of bauxite imports in May to stockpiling before higher export duties and export restrictions come into effect in Indonesia. Based on the Indonesian bench mark bauxite export price set May 28th, bauxite exports during June will pay duties of USD 3.1-3.6/mt following the imposition of a 20% tax. Qualified exporters also have to obtain official approval to build any local alumina plant.

Alumina

Customs data show that China’s alumina imports surged 537.17% during May, rising to 720,000 mt, while the January to May total also rose 128.6% to 2.16 million mt. The sharp increase in May was the result of stable domestic prices while prices declined in Australia. Mainstream traded prices for domestically produced alumina were at RMB 2,600-2,750/mt, but the average FOB Australian alumina price was USD 320/mt, and equivalent to RMB 2,550/mt after adding USD 25/mt in freight costs and a 17% value-added tax. After adding in all other costs, imported alumina prices were still below RMB 2,700/mt.

Aluminum

China’s primary aluminum imports fell in May to 34,450 mt, down 14.6% MoM, but up 89.9% YoY, and due to high import premiums and slow shipments from LME-bonded warehouses. A higher SHFE/LME aluminum price ratio also created arbitrage opportunities.