Customs data shows that from January to September 2023, China’s primary aluminum imports rose significantly by 163.93% YoY to 956,100 mt. Exports dropped by 41.31% YoY to 112,900 mt. This resulted in a net import volume of 843,200 mt, up 496.16% YoY.
In September 2023, primary aluminum imports totaled 200,800 mt, up 210.38% YoY and 30.97% MoM. Exports were 7,100 mt, up 266.49% YoY, despite down 72.33% MoM. This resulted in a net import of 193,700 mt, up 208.7% YoY and 51.58% MoM.
(The aforementioned import and export data are based on the customs codes 76011090 and 76011010.)

In September 2023, China's main primary aluminum import sources were Russia, India, and Australia. Russia topped with 152,900 mt, up 234.77% YoY and 16.58% MoM, accounting for 76.15% of total imports. Cumulative imports from Russia from January to September were 806,300 mt, consistently rising since May 2023. SMM analysis suggests this is due to improving profitability of China's primary aluminum imports since May. However, as import profits began to decrease by September's end, October's imports from Russia may stabilize or slightly decline.

Additionally, September 2023 saw 20,000 mt of primary aluminum imports from India, up 376.41% YoY and 128.58% MoM, contributing to 9.95% of total imports, ranking second. Australia was third with 11,200 mt, making up 5.57% of the total.

In September 2023, 91% of China's primary aluminum imports were through general trade, up from August's 65%. This shift was due to the open import window in September, causing goods previously entering through customs special supervision areas and bonded areas to switch to general trade.

Export Analysis:

In September 2023, nearly all (99.955%) of China's primary aluminum exports were through special customs supervision areas, due to export tariff making export unprofitable. Hence, the exports shown in the customs data are mostly the outflows of overseas aluminum ingots transiting through bonded areas. In September, the total volume of primary aluminum exported through special customs supervision areas amounted to 7,048 mt, down 18,400 mt or 72.35% MoM. This is mainly because the profit from China's import of primary aluminum was considerable, causing a large volume of primary aluminum from bonded areas to enter the Chinese market.

Summary

The opening of import window since late August has seen a surge in China’s primary aluminum import volume, which hit year-to-date high in September. Entering October, both domestic and overseas aluminum prices pulled back, with the former falling drastically after the National Day holiday as a result of inventory build-up and lower-than-expected consumption. Consequently, primary aluminum import profits shrank significantly and even turned into losses by mid-October. Russian aluminum may dominate China’s aluminum imports in the future. Considering the arrivals of previously ordered aluminum ingots, China’s primary aluminum net imports should remain high in October, estimated at around 150,000 mt. However, November could see sharp declines in import volumes. It was reported that Rusal is mulling over shutting down some unprofitable smelters, citing disappointing aluminum prices and poor profit margins, involving a production capacity of 500,000 mt of aluminum. If production is cut within this year, there could be a decline in China’s aluminum imports. SMM will continue keep a close eye on any possible disruption in overseas supply.