SHANGHAI, Oct. 23 (SMM) – China imported 230,000 mt of scrap aluminum in September, down 6.1% MoM. YTD scrap aluminum imports through September hit 1.94 million mt, up 1.7% YoY, according to China Customs.
Softer demand and tight supply overseas in July and August were the main reasons behind the falling scrap aluminum imports in September.
First, arrivals of imported scrap aluminum in September were mostly orders made in July and August, which are seasonally low-demand period for domestic cast aluminum alloy consumption. Limited orders in September eroded demand for imported scrap aluminum from some cast aluminum alloy producers. These, coupled with the concentrated arrivals of imported goods, resulted in ample goods at producers. Second, domestic scrap aluminum prices were relatively lower with the arrival of imported scrap aluminum in July and August, so some producers increased purchases of domestic scrap aluminum, with lower intention of buying imported scrap aluminum. Third, tight supply overseas from the summer break and resale of imported scrap aluminum to India and Southeast Asia where prices are higher, also contributed to lower scrap aluminum imports in September.
SMM expects scrap aluminum imports to remain at a low level in October, since demand from domestic secondary aluminum producers has shown no signs of significant improvement and as aluminum alloy ingot processing trade remains weak.