[SMM Analysis] if the price difference appears, can ADC12 be imported?

Published: Jun 21, 2019 21:00
The author finds that because all the imported waste aluminum is added to the restricted catalogue in July, the domestic demand for imported waste aluminum is about to decrease, which makes the price of overseas waste aluminum fall, then the foreign / domestic ratio of recycled aluminum decreases in theory, and the possibility of import of recycled aluminum appears. The market has paid more attention to the import of recycled aluminum, so the question arises, does the appearance of price difference mean that ADC12 can be imported? The author will take an inventory of the problems in the middle of the import of ADC12.

The author finds that because all the imported waste aluminum is added to the restricted catalogue in July, the domestic demand for imported waste aluminum is about to decrease, which makes the price of overseas waste aluminum fall, then the foreign / domestic ratio of recycled aluminum decreases in theory, and the possibility of import of recycled aluminum appears. The market has paid more attention to the import of recycled aluminum, so the question arises, does the appearance of price difference mean that ADC12 can be imported? The author will take an inventory of the problems in the middle of the import of ADC12.

First of all, from the issue of customs declaration, the import tariff number is 7601200090 (other unforged aluminum alloys), and the import provisional duty rate is 7%, but the following agreement countries can waive tariffs, so we should try our best to choose the sources of goods in the following areas. Customs declaration alone is not as limited as waste aluminum.

Second, the problem of domestic sales channels. The area with the highest added value of ADC12 is the automobile field, and the raw materials used by automobile factories need to be strictly examined, so the imported ADC12 can only be used in the low-end market. And the sales channel of the recycled aluminum market is relatively closed, for unknown quality and source of product trust is low, in the absence of familiar downstream customers, most of the products can only enter the market through traders. The actual price is lower than the lowest price in China and needs to float to a certain extent, which is not as much space as it seems.

Third, the risk is lower than other primary alloy products. First of all, the domestic market demand is weak, prices continue to fall, in addition, trade wars make exchange rate changes are also likely to erode profits, the most important thing is that ADC12 price changes do not completely follow the linear change of aluminum prices, the difficulty of arbitrage is even greater. And because it is foreign trade, delivery time is long, compared with domestic products, the risk of market volatility is greater.

Fourth, the question of payment. Most of the domestic recycled aluminum transactions contain a certain account period, and almost all foreign trade is settled in cash, which makes the sales customers of imported ADC12 more limited.

In addition to the above, the duration of the import window is uncertain, and opportunities may be fleeting for traders who are not familiar with the whole set of links.

(Shanghai Nonferrous net is easy to shine)

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