November Net Imports of Primary Aluminum Down 23.5% YoY; Continued Losses in December Hamper Import Growth [SMM Analysis]

Primary Aluminum Imports: According to data from the General Administration of Customs, China's primary aluminum imports in November 2024 were approximately 150,700 mt, down 13.8% MoM and 22.5% YoY. From January to November, cumulative imports of primary aluminum totaled about 1.975 million mt, up 44.5% YoY.

Primary Aluminum Exports: Data from the General Administration of Customs shows that China's primary aluminum exports in November 2024 were approximately 18,800 mt, up 18.0% MoM but down 14.0% YoY. From January to November, cumulative exports of primary aluminum totaled about 108,000 mt, down approximately 20.0% YoY.

Net Imports of Primary Aluminum: In November 2024, China's net imports of primary aluminum were approximately 132,000 mt, down 17.0% MoM and 23.5% YoY. From January to November, cumulative net imports of primary aluminum totaled about 1.866 million mt, up 51.5% YoY. (The above import and export data are based on HS codes 76011090 and 76011010.)

Import Analysis:
From the perspective of import origin, China's primary aluminum imports in November 2024 mainly came from countries and regions such as the Russian Federation, China, India, and Indonesia. Among them, imports from Russian aluminum totaled approximately 100,000 mt in November, up 3.3% MoM, accounting for 66.5% of the total imports in October. From January to November, imports of primary aluminum from Russia totaled about 1.003 million mt, accounting for 50.8% of the total imports from January to October.

Additionally, imports of primary aluminum from China in November were approximately 29,000 mt, down 49.4% MoM. This portion mainly consisted of aluminum ingots processed from alumina exported from China to Russia and then re-imported into the Chinese market. In terms of the origin of these aluminum ingots, Russian aluminum ingots still dominated. From January to November, this form of imports totaled about 349,000 mt, accounting for 17.7% of China's total primary aluminum imports.

In November, overseas primary aluminum imports were in a loss-making state, with losses widening. Imports of aluminum ingots from countries such as Indonesia and Malaysia showed a MoM decline, with many aluminum ingots in these regions being transshipped at ports to other countries and regions.

Trade Mode:
In terms of trade mode for primary aluminum imports in November, import losses widened, and suppliers were less willing to clear customs and ship to the Chinese market, leading to a 13.8% MoM decline in total imports. Among these, imports directly entering the Chinese market through Ordinary Trade amounted to only 66,000 mt, down approximately 3.9% MoM. Imports through Entrepot Trade by Customs Special Control Area and processing trade modes, such as tolling, failed to sustain the growth trend seen in October, declining 26.9% MoM. The tolling trade mode primarily refers to the aforementioned imports from China to China. This trade mode for primary aluminum imports has shown overall growth this year and may become the main mode of primary aluminum imports in the future. Customs data shows that from January to November, imports of primary aluminum through tolling trade totaled about 360,000 mt, accounting for approximately 18.3% of China's total primary aluminum imports. Tolling trade and Ordinary Trade modes mainly reflect the actual consumption of overseas primary aluminum in the domestic market. In November, imports through these two modes totaled approximately 108,000 mt, while cumulative imports from January to November reached about 1.347 million mt, accounting for approximately 68.2% of total imports.

SMM Comments: On November 15, China announced the cancellation of aluminum semis export tax rebates effective December 1, which has widened the price spread between domestic and overseas markets. Currently, the loss on primary aluminum imports remains above 2,000 yuan/mt, reducing the willingness of overseas suppliers to clear customs and ship to China. Some aluminum ingots at ports have been redirected to other countries and regions. Therefore, future net imports of primary aluminum in China may primarily rely on tolling and processing trade volumes, while Ordinary Trade is expected to decline due to the significant domestic-overseas aluminum price inversion. SMM forecasts that China's net imports of primary aluminum in December may decline both YoY and MoM.