According to the General Administration of Customs, China exported 536000 tons of unforged aluminum and aluminum materials in May, an increase of 7.63 percent over April and 10.52 percent over the same period last year. As can be seen from the figure below, although the international trade environment this year is more severe than in previous years, the export volume of unforged aluminum and aluminum materials remained high in May.

SMM believes that the increase in unforged aluminum and aluminum exports in May is mainly due to the following reasons.

Source: general Administration of Customs, SMM

1) the devaluation of RMB stimulates. The devaluation of the renminbi stimulates domestic commodity exports. Judging from the trend of the offshore renminbi, the value of the offshore renminbi was around 6.72 in April, while it depreciated to around 6.87 in May under the influence of some macro factors. And there was a trend of further devaluation in June.

2) the improvement of export environment in ASEAN and countries along the "Belt and Road Initiative" route. According to the General Administration of Customs, in the first five months, the European Union was China's largest trading partner, with trade between China and the EU totaling 1.9 trillion yuan, an increase of 11.7 percent, accounting for 15.7 percent of the total value of our foreign trade. Of this total, exports to the European Union totaled 1.13 trillion yuan, an increase of 14.2 per cent. ASEAN is China's second largest trading partner, with a total trade value of 1.63 trillion yuan, an increase of 9.4 percent, accounting for 13.5 percent of the total value of China's foreign trade. Of this total, exports to ASEAN totaled 913.02 billion yuan, an increase of 12.9 percent. Thanks to the development of national foreign policy and the improvement of diplomatic status, ASEAN and the countries along the "Belt and Road Initiative" line have become one of the ideal places for China's aluminum exports, and the economic exchanges with the two places have promoted the increase of aluminum exports.

3) with regard to the exchange between SMM and domestic downstream manufacturers, it has been learned that although the Shanghai-to-London ratio has increased slightly recently, the deep processing cost of aluminum is actually still in a higher position because of the high labor costs abroad, while the domestic labor and site costs are relatively low. Aluminum processing fees are also falling under the fierce domestic competition, so China's aluminum exports to foreign countries still have a certain comparative advantage.

4) tariff effect, export front. The US announced an increase in the tariff rate on $200 billion of listed goods imported from China from 10 per cent to 25 per cent, which was subsequently extended by the Office of the US Trade Representative (USTR) until June 15. Although the United States has little impact on products such as aluminum profiles, but it still has a certain impact on aluminum materials such as 6, 7 series aluminum alloy plates and thick plates above 6.35mm thickness. Downstream manufacturers tend to lead exports in order to reduce tariff costs.

(SMM Xu Man 021 51595898)