China’s imports of aluminium scrap expand 66% on-year in Jun

SHANGHAI, Aug 5 (SMM) – China’s imports of aluminium scrap rose 66.24% from a year ago and 3.05% from a month ago to stand at 182,700 mt in June, the last month before restrictions on Category Six materials took effect, showed data from China Customs.

Importers are not allowed to move seaborne Category Six aluminium scrap into China from July, unless they have the approvals from the central environmental authorities. This prompted an import rush before July.

The growth from a year ago was significant as volumes in May-June 2018 were low after China imposed a levy of 25% on US aluminium scrap in April 2018. American aluminium scrap accounted for about 30% of China’s total imports.

Imports of aluminium scrap are expected to shrink on the month and the year in July, and to rebound in August, as importers did not receive the approvals for the latest batch of import quotas until the end of July.

The latest two batches of import quotas largely unchanged from imported volumes in the third quarter of 2018, and included almost all major importers.

The Chinese government’s tighter grips over aluminium scrap imports are set to turn the scrap market overseas oversupplied, and drag on prices, generating greater profit margins for domestic secondary aluminium producers who use imported aluminium scrap as feedstock.