[SMM Analysis] China's imports of unwrought aluminum and aluminum products increased by more than 7 times in August compared with the same period last year. The main reasons are these three factors.

Published: Sep 24, 2020 18:58

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China imported 429464 tons of unwrought aluminum and aluminum products in August, up 723.6 percent from a year earlier and 9.8 percent from July, according to data released by the General Administration of Customs on Wednesday. China's imports of unwrought aluminum and aluminium products in August were the highest monthly level since April 2009. China's exports of unwrought aluminum and aluminum products totaled 395424 tons in August. From January to August this year, China imported 1637294 tons of unwrought aluminum and aluminum products, an increase of 346.9 percent over the same period last year.

SMM9: China imported 429464 tons of unwrought aluminum and aluminum products in August, up 723.6 percent from the same month last year and 9.8 percent from July, according to data released by the General Administration of Customs on Wednesday. China's imports of unwrought aluminum and aluminium products in August were the highest monthly level since April 2009. China's exports of unwrought aluminum and aluminum products totaled 395424 tons in August. From January to August this year, China imported 1637294 tons of unwrought aluminum and aluminum products, an increase of 346.9 percent over the same period last year.

The total amount of unwrought aluminum and aluminum includes raw aluminum and aluminum, while imports increased sharply in August, of which 40-50% are expected to be imported original aluminum ingots. There are three main reasons for the surge in imports that month:

1) premise: domestic demand is OK. According to SMM research, the domestic traditional off-season consumption from July to August is not light, especially aluminum strip, aluminum foil and aluminum profiles and other major plates are stable, and the demand is OK. Some Guangdong profile factories and Henan strip and foil factories contacted by SMM have purchased imported aluminum ingots within the opening time of the import window.

2) advantage: the Hulun ratio is high. Due to the upside down of domestic and foreign aluminum prices, the ratio is above 8, there is profit space for imports, and even some enterprises that have not been involved in the field of import and export spot trade have begun to consider importing aluminum ingots, resulting in a surge in imports of aluminum ingots since May.

3) other: RMB appreciation. Judging from the trend of the offshore RMB, the RMB has been in a trend of appreciation since August, creating conditions for a big increase in imports.

With regard to the import volume of unwrought aluminum and aluminum products in September, as the import window is still open, and there is no obvious deterioration trend in domestic demand, according to SMM research, there is still a continuous inflow of imported aluminum ingots in mid-September, and it is expected that the import volume of unwrought aluminum and aluminum products in September will still be able to increase greatly compared with the same period last year. SMM will also continue to follow up the investigation.

Import and export unwrought aluminum

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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