China issued import quotas for another 100 mt of aluminium scrap

SHANGHAI, Mar 10 (SMM) – China's environmental authorities on March 7 issued the fourth batch of aluminium scrap import quotas for 2020, allowing 100 mt of high-grade aluminium scrap to enter China.

This brought aluminium scrap import allowances for this year granted so far to 284,549 mt. 

The volumes of import quotas so far stood 87.5% higher from the actual imports in the fourth quarter 2019, but 14.2% lower from the actual imports in the first quarter 2019. 

A steep decline in aluminium scrap import quotas in the fourth quarter last year resulted in supply shortage and kept prices of aluminium scrap at high levels till the 2020 Chinese New Year holiday. A coronavirus outbreak extended the holidays in the secondary aluminium sector, with small-scale recyclers further prolonging their suspension. This reduced aluminium scarp supply and continued to support its prices post-holiday.  

However, SMM expects prices of aluminium scrap to face some headwinds in the coming weeks as downstream demand was also badly hit by the virus outbreak. The combination of subdued demand and an inflow of seaborne materials is likely to keep prices of ADC12 aluminium alloy ingot, a type of finished product of secondary aluminium, under pressure in the near term. Declines in aluminium prices on macroeconomic uncertainties will also cap any upside room in aluminium scrap prices. 

According to SMM estimates, China’s aluminium scrap imports for 2020 could halve from a year ago.

China’s standards on recyclable copper, brass, aluminium alloy casting raw materials, which will exempt high-purity scraps from the licensed quota-based import system, will come into force on July 1.