Analysis of China’s primary aluminum and aluminum semis imports and exports

SHANGHAI, Aug 9 (SMM) –

Primary Aluminium: As recorded in June 2023, China's total import volume of primary aluminium reached 89,400 mt, marking a monthly increase of 20.7% and an annual leap of 213.6%. The total exports of primary aluminium in June amounted to 32,900 mt, all in the form of supervision by customs, registering a monthly growth of 187% and a staggering annual increment of 400%. The domestic trading activities for primary aluminium in June resulted in a net import of 56,400 mt, representing a monthly decrease of 9.8%, yet a substantial annual rise of 158%. The cumulative net imports of primary aluminium from January to June 2023 stood at 430,500 mt, witnessing a momentous year-on-year surge of 1747.6%. June saw no significant uptick in domestic aluminium ingot imports, primarily due to the narrowed—but still uncompetitive—profits compared to those from aluminium ingots in other overseas regions, despite reduced losses from domestic aluminium ingot imports by month's end. In June, ports in regions like Japan experienced a marginal rise in premiums, prompting the transfer of some goods out of bonded areas. This primarily accounts for the customs data in June, which indicates a transfer of approximately 33,000 mt of aluminium ingots from the specially supervised customs areas.

Aluminium semis: China’s total export volume for June 2023 saw a decrement of 1.14% from the previous month and a 24.8% dip year-on-year, totaling 439,000 mt. In particular, the exports of aluminium plate/sheets, strips, and foil manifested a more pronounced year-on-year contraction. Conversely, the extrusion segment witnessed an uptick in export volume on both a monthly and annual basis. During the first half of 2023, the cumulative export volume of aluminium semis was around 2.636 million mt, marking an 18% drop compared to the previous year. The aluminium semis sector maintained its year-on-year downtrend. On one hand, there was a downturn in the demand for aluminium plates, strips, and foils overseas. On the other hand, a significant decrease in the year-on-year profit from domestic aluminium semis exports led to diminished enthusiasm among domestic aluminium processing companies. Nevertheless, exports in the areas of photovoltaic profiles and similar sectors have been faring well this year, primarily driving steady growth in the aluminium extrusion sector.

In the near term, since late June, there's been a divergence in the trends of domestic and international aluminium prices. Against the backdrop of a substantial overseas economic downturn, the London Metal Exchange (LME) aluminium prices have markedly trended downwards, leading to an improvement of SHFE/LME aluminium price ratio. Early July saw a temporary opening of aluminium ingot import window, with expectations of a significant uptick in subsequent import data. Nonetheless, the continued weakness in exports of aluminium plates, strips, and foils is constraining the growth of domestic aluminium semis exports. Consequently, it's projected that the export of domestic aluminium semis will persist in its year-on-year downtrend in July.