2024 Imports of Aluminum Alloy Ingots Up 7% YoY, With Multiple Factors Expected to Cause a Subsequent Decline [SMM Analysis]

SMM, February 7:

According to customs data, in December 2024, China's imports of unwrought aluminum alloy reached 105,600 mt, down 6.5% YoY and up 3.6% MoM. From January to December 2024, cumulative imports totaled 1.2131 million mt, up 7.1% YoY. In December 2024, exports of unwrought aluminum alloy amounted to 21,200 mt, up 7.5% YoY and 5% MoM. From January to December 2024, cumulative exports reached 242,300 mt, up 0.3% YoY.

The chart below shows the monthly import and export volumes of unwrought aluminum alloy from 2023 to 2024:      

From the perspective of import sources, in December 2024, the top five countries for China's imports of unwrought aluminum alloy were Malaysia (44,000 mt), Thailand (14,300 mt), Russia (10,300 mt), South Korea (10,200 mt), and Indonesia (4,100 mt). Among them, Malaysia experienced a significant decline in imports in November due to port congestion. However, as the congestion eased, imports from Malaysia increased by 6,700 mt in December, becoming the main driver of the month's import growth, while imports from other countries slightly decreased.

For the whole year of 2024, Malaysia remained the largest source of unwrought aluminum alloy ingot imports, with a total of 521,300 mt, and its share rose from 42% in 2023 to 43%. The other major sources were Thailand, Vietnam, Russia, and South Korea, with shares of 14.2%, 7.9%, 7.7%, and 6.1%, respectively. The top five countries accounted for 79% of the total, up from 75% in 2023. Imports from Thailand saw the largest increase, up 59,000 mt YoY to 172,000 mt.

Changes in import volumes from major countries for unwrought aluminum alloy in 2023 and 2024 (unit: 10,000 mt):

China's country-specific import and export data for unwrought aluminum alloy in 2024:

On the export side, Japan remained the largest destination for domestic aluminum alloy ingots in 2024, accounting for 49%, followed by South Korea and Mexico, with the three countries collectively accounting for about 78%. The primary trade modes were processing with supplied materials and processing with imported materials, accounting for 64% and 22%, respectively, while Ordinary Trade accounted for only 0.6%.

Overall, driven by increased imports from Malaysia, imports of unwrought aluminum alloy ingots in December 2024 increased slightly MoM. After mid-November, due to the price spread between domestic and overseas markets turning negative and the depreciation of the RMB, imports of ADC12 remained in a loss-making state, and the import window closed. By the end of January, overseas prices for imported ADC12 had pulled back to $2,420-2,440/mt, and the immediate losses on imported ADC12 gradually narrowed to near the break-even point, eventually turning into a slight profit. Considering the losses on imports and the impact of the Chinese New Year holiday, aluminum alloy ingot port arrivals in January-February are expected to decline slightly.

For the full year, imports in 2024 increased by 80,000 mt YoY to 1.21 million mt, up 7% YoY. The import volume of aluminum alloy ingots in 2023 was the lowest since the import window opened in 2020, and total imports rebounded in 2024. Policy changes may affect imports in 2025. On November 15, 2024, the Ministry of Finance and the State Taxation Administration issued the "Announcement on Adjusting the Export Tax Rebate Policy," which canceled export tax rebates for aluminum products starting December 1, 2024. The listed products did not include aluminum alloy, and since aluminum alloy exports are mainly conducted through processing trade, the actual impact is relatively small. However, the cancellation of export tax rebates for aluminum semis may push up overseas aluminum prices. Additionally, with the growing overseas aluminum scrap processing industry in recent years, competition for aluminum scrap purchases from overseas has intensified, leading to an expected increase in aluminum scrap prices, which could drive up aluminum alloy ingot prices. Under losses, subsequent import volumes are expected to decline. Furthermore, Chinese secondary aluminum plants established overseas prioritize supplying local downstream enterprises, making it difficult to supplement the domestic market on a large scale. It is also worth noting that the new aluminum scrap import policy explicitly allows the free import of standard-compliant secondary wrought aluminum alloy raw materials. Approximately 40% of imported aluminum alloy ingots are remelting ingots used by secondary aluminum plants. With the implementation of the new policy, secondary aluminum plants may directly purchase aluminum scrap as raw material, potentially reducing the procurement of remelting ingots.