China primary aluminum net imports hit new high in October, more overseas ingots will flow into China as import window shows signs of re-opening

Customs data showed that China imported 1.17 million mt of primary aluminum in January-October, up 173% YoY. Exports were 113,400 mt, down 41.19% YoY. This brought net imports to 1.06 million mt, up 347.33% YoY.

In October, imports rose 221.19% YoY and 7.9% MoM to 216,600 mt, while exports declined 4.67% YoY and 91.29% MoM to 600 mt, bringing net imports to 216,00 mt, up 223.4% YoY and 11.51% MoM.

The above data are based on HS code 76011090 and 76011010.

The top sources of imports in October were Russia (65.48% of total imports), Indonesia, Australia, India and Malaysia. Imports from Russia fell 7.2% MoM mainly because the import window closed in mid-October, making it unprofitable for high-cost Russian metal to enter China. Russia remained the dominant supplier, even though its share of China’s total imports lost 10.67 percentage points compared to September.

It’s worth noting that some amount of primary aluminum did not actually enter the Chinese market but was temporarily stored in bonded warehouses instead due to closure of import window in mid-October. Imports were primarily under general trade, constituting 79% of total imports, down 12 percentage points compared to September.

Since mid-November, import losses have kept narrowing mainly thanks to strengthening RMB. As of November 21, import losses even turned into small profits, suggesting that the import window has shown signs of opening. We thus estimate that some overseas aluminum ingots will keep flowing into China.