SHANGHAI, APR 13 (SMM) – China exported 594,400 mt of unwrought aluminium and aluminium semis in March, up 34% YoY. The unwrought aluminium and aluminium semis exports totalled 1.6283 million mt in January-November, up 26.7% YoY. Since August 2021, China's unwrought aluminium and aluminium semis exports have increased significantly YoY, and reached a record high in the first quarter of this year.
The main reasons for the sharp increase of domestic unwrought aluminium exports are as follows:
First, domestic policy support. For a long time, domestic aluminium processing and aluminium semis enterprises not only enjoy a series of policy benefits supported by the state to support the development of the industry, such as tax reduction and fee reduction, but also have no tariff restrictions on all aluminium exports. Except aluminium powder, aluminium wire and some non-alloy aluminium extrusions, other aluminium exports enjoy a full tax rebate rate of 13%.
Second: in the first quarter, the domestic aluminium prices maintained the low, the SHFE/LME ratio continued to operate at a low level. As the domestic aluminium export profits rose, and traders took orders actively.
Third: the pandemic situation in south-east Asia and other countries has not been effectively controlled, and the operating rate of local aluminium processing enterprises continues to be low, increasing the dependence on China's aluminium.
Fourth: there are tariffs on domestic primary aluminium exports, which makes it difficult to export. Aluminium factories in Europe and other places were mainly reducing production, so there is a shortage at the overseas aluminium supply. The shortage led to the increasing import demand for aluminium products to replace the primary aluminium, and promote domestic aluminium semis exports in this regard.
According to the short-term forecast, aluminium prices at home and abroad will fell in April, but the pattern of high abroad aluminium prices and low domestic aluminium prices will remain, and the domestic aluminium exports will remain high. However, since March, the domestic pandemic interfered with the operation and transportation of domestic aluminium processing enterprises, and ports in Shanghai and other regions were severely blocked. So that aluminium exports might not be delivered on time, resulting in a decline in export volume. In addition, the rising sea freight also increases the export risk of some aluminium CIF orders and inhibits the willingness of relevant domestic enterprises to receive orders.
