SHANGHAI, Sep 21 (SMM) — China approved just 121,000 mt of aluminium scrap for imports in its 12th batch of approvals, bringing the total approved amounts to 818,000 mt so far this year, according to the China Solid Waste and Chemicals Management. As there are normally 3-4 batches of approvals in each quarter and the approved amounts in one of the batches are much higher than other batches for the quarter, SMM estimates that import quotas for Q4 will total 130,000-150,000 mt, 60% lower than in Q3.
Aluminium scrap imports by quarter 2018-2020E
A secondary aluminium producer in Jiangsu province that uses imported aluminium scrap obtained 16,620 mt of import quotas in the 12th batch of approvals, ranking the second. This leaves its monthly average import quotas at around 5,540 mt, which is barely enough to produce 5,000 mt of ADC12 secondary aluminium per month. The producer’s monthly average output of ADC12 secondary aluminium exceeded 12,000 mt in 2019, with monthly export orders in excess of 5,000 mt.
Based on the correlation between aluminium scrap imports and ADC12 secondary aluminium prices over the past two years, SMM believes that prices of ADC12 secondary aluminium will exceed those of A00 aluminium in the short term. Imported aluminium alloy ingots are likely to become popular again to fill the supply deficit of aluminium scrap.