[SMM Analysis] Analysis of the influence of the change of Import waste Aluminum Policy on Aluminum Industry chain

In July, following the addition of waste aluminum scrap to the list of solid wastes that can be used as raw materials in 2019, on June 30 this year, the Ministry of Ecology and Environment said that the import of solid waste would be completely banned next year and applications would no longer be accepted. Reiterate the ban on the import of solid waste next year. At the same time, the standard of "recycled cast aluminum alloy raw materials" drafted by the recycled Metals Branch of China Nonferrous Metals Association is also scheduled to be implemented on July 1 this year. So how much impact does it have on the aluminum industry chain?

Because the waste aluminum is all alloyed products, its application in the aluminum industry is concentrated in the downstream, and because of the difference in aluminum content of different aluminum products, waste aluminum is usually divided into 98% aluminum content, which is divided into cooked aluminum (aluminum content more than 98%) and raw aluminum (aluminum content less than 98%). From an economic point of view, it is obvious that only wrought aluminum can be used in the field of wrought alloys, while raw aluminum can only be used in the field of casting alloys. Therefore, the impact of waste aluminum on the aluminum industry starts from the downstream, and because of the different proportion of primary aluminum in its end products, the difference in pricing methods makes it necessary to look at the impact separately.

In addition to the problem of raw and cooked aluminum, the supply pattern of overseas waste aluminum is also a background that needs to be understood. As the overseas electrolytic aluminum supply is in a tight balance or a small shortage, overseas processing enterprises have to use some waste aluminum supplement, in which cooked aluminum with relatively high aluminum content is relatively more popular, which makes under normal circumstances, overseas cooked aluminum flows into the market less and the price is relatively high. The raw aluminum part is relatively cheap and oversupplied, previously domestic imports of waste aluminum are mainly raw aluminum. In other words, the influence of imported waste aluminum on the processing of deformed alloys has been relatively small. And from the field of waste aluminum application, due to the impact of the epidemic, overseas demand is weak, the current foreign clean waste profile doors and windows price is about 1400 US dollars / ton, compared with the domestic profile aluminum price difference of only 300,000 500 yuan / ton, even a small amount of import impact is also concentrated on 6063 aluminum bars.

The impact of the new import standard mainly lies in the traditional recycled aluminum industry, and its biggest impact is to change the structure of domestic raw materials, which directly affects the import window of aluminum alloy ingots. Due to the relative excess supply of overseas raw aluminum mentioned above, overseas raw aluminum prices usually have certain advantages over domestic prices, especially after long-term restrictions on the import of waste aluminum, the domestic and foreign price difference can reach 1500 yuan / ton. even if the price difference rises due to the increase in domestic purchase volume, there is still a long time to fully repair the price difference. The impact is that if the waste aluminum can be imported directly without approval, the profits of overseas recycled aluminum plants will flow back to China, and the profits of imported aluminum alloy ingots will be greatly reduced. Only when overseas demand is slow, there may be a small amount of risk profits due to the risk of fluctuations in goods and shipping prices. On the contrary, if the waste aluminum can not be imported directly and smoothly, there will be an outflow trend of domestic recycled aluminum production capacity, and imported aluminum alloy ingots will continue to be popular. At present, because the traditional six types of waste aluminum approval Q3 is still flat than Q2, in the short term, the new standard of waste aluminum has not fallen to the ground, the domestic recycled aluminum market pattern continues to maintain, and the trading volume may decrease slightly due to the increase of wait-and-see mood.

Finally, the author expounds the author's personal view on the problem of original aluminum waste aluminum that everyone pays close attention to. First of all, it is difficult to use the casting aluminum alloy with the largest amount of waste aluminum to replace the original aluminum, and its prerequisite is that there are profits in the processing fee of the aluminum alloy ingot, that is, there are two cases. one is that the shortage of waste aluminum will lead to the replacement of waste aluminum when the demand of cast aluminum alloy is good, and the other is that although the demand of cast alloy is not good, the price of aluminum is very low, which is similar to the market from mid-March to mid-April. There will also be a large number of original aluminum waste aluminum. Under the current high aluminum price and weak casting alloy demand, the shortage of waste aluminum will lead to the import of a large number of aluminum alloy ingots. In addition to casting aluminum alloy ingots, the original aluminum waste aluminum on the aluminum bar will continue to exist, but its quantity will gradually decrease, which is reflected by the gradual increase of the proportion of waste aluminum. In addition, due to the overall reduction of waste aluminum supply due to the weakening impact of the epidemic this year, the proportion of waste aluminum in aluminum bars will be reduced for a long time compared with the same period last year.

(Shanghai Nonferrous net is easy to shine)