SHANGHAI, Jan 22 (SMM)－Aluminium scrap will be in short supply in China this year, as the domestic aluminium scrap market continues to be plagued by tight supplies since December 2017, according to SMM analysis.
Supply has been limited given regulations that restrict the import of aluminium scrap in China as well as prerequisites on the level of impurity in imported scrap aluminium. The shortage is compounded by environmental protection measures that have significantly reduced demolition work. As the review of scrap aluminium invoices intensifies towards the end of the year, the lack of a dedicated invoice system for aluminium scrap further compounds the problem of tight supplies.
As domestic companies seek alternatives, one solution could be to use aluminium scrap produced domestically. However, sellers' credit and material quality often deter domestic companies from switching their source of supplies. On the invoice issue, it is unlikely that the issue will be resolved if no policies are introduced by the government.
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