Impact of China's proposed tariff on US aluminium scrap remains to be seen

SHANGHAI, Mar 27 (SMM) – China’s Ministry of Commerce has proposed to levy a 25% tariff on aluminium scrap imports from the US in a bid to offset the losses brought by the US tariffs on Chinese steel and aluminium products.

While the move may increase procurement costs for Chinese secondary aluminium plants given that 30% of China’s aluminium scrap imports come from the US, SMM believes it is still early to make such conclusion.

More negotiations are likely to take place between the two countries before the tariffs come into effect, when keen sellers may look to lower their offers.

In fact, aluminium scrap processing costs have already increased as China limits the impurities to 1% this year, from the previous 2%. The complete ban on imports of Category Seven scrap materials, effective from the end of this year, would also see aluminium scrap imports shrink as a whole.

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