Imports of Chinese primary aluminium plunge by 7.1% M-o-M in May 2022

The General Administration of Customs reported that in May 2022, China's primary aluminium imports closed at 37,300 tonnes, which reflected M-o-M hike of 7.1 per cent and a Y-o-Y plunge of 61 per cent. The exports, on the other hand, settled at 65,100 tonnes, up by 103.1 per cent M-o-M and up 7046.8 per cent from the previous year. Therefore, 27,800 mt were exported net.

Between January and May 2022, imports of primary aluminium were 168,700 tonnes, down 71 per cent Y-o-Y, while exports of the metal totalled 170,000 tonnes, up 4449 per cent. Primary aluminium commerce inside the country reversed to a net export of 1,341 tonnes, a 100 per cent Y-o-Y decline.

The mentioned analytics refers to items with the HS codes 76011010 and 76011090. SMM primarily analyses import and export under HS code 76011090 (unwrought, unalloyed aluminium with an aluminium content of at least 99.95 per cent), as items under 76011010 are mostly high-purity aluminium and have a modest market share.

In May, China imported 37,200 tonnes of regular aluminium ingots, up 7.6% M-o-M but down 61.16% Y-o-Y. From April to May, the import window for aluminium ingots remained closed, with import losses of almost RMB 2,600 per tonne. Therefore, the imports of regular aluminium ingots only marginally increased in May. Imports of aluminium ingots fell mostly under general commerce in May. 25,000 tonnes of imports under the general and tolling trade categories were made, making up 67.1 per cent of the overall volume of imports.

Ingots of regular aluminium were still mostly imported into China from Russia in May. China was the top importer of common aluminium ingots from Russia in May, bringing in 32,700 tonnes, or 87.9 per cent of all imports. China brought in 124,400 tonnes of regular aluminium ingots from Russia between January and May, making up 74.1 per cent of all imports and increasing by 17.4 per cent Y-o-Y.

China exported 64,100 tonnes of regular aluminium ingots in May 2022, up 103 per cent over the same month the previous year. From January to May, 166,500 tonnes of aluminium ingots were exported. Theoretically, the export window remained closed in May due to LME aluminium's continuing performance below SHFE aluminium, which, when combined with a 15 per cent levy on primary aluminium exports, should have prevented primary aluminium shipments. However, real exports increased by 103 per cent M-o-M, mostly due to products under special customs supervision regions, with large quantities of aluminium ingots leaving bonded zones in Guangdong and Shanghai.

China continued to maintain net imports of aluminium ingots since imports of more than 30,000 tonnes per month outweighed exports, which were mostly the result of commodities leaving bonded regions. In May, China exported 591,100 tonnes of aluminium semis, up 38.56 per cent Y-o-Y, with aluminium plate/sheet, strip, and foil accounting for the majority of the rise. From January to May, China exported 2.65 million tonnes of aluminium semis, up 27 per cent from the same period last year.

In June, domestic and international aluminium prices plunged precipitously as a result of US interest rate increases and economic gloom in the US. However, as the domestic epidemic situation has improved, local demand has recovered, and domestic aluminium ingots have maintained their destocking cycle, allowing domestic aluminium prices to decline less quickly than international prices. The import loss of aluminium ingots steadily decreased as a result of the increase in the SHFE/LME aluminium pricing ratio. Expect the import window to open.

Aluminium semis export revenues decreased in June after reaching a high point. Companies that export aluminium plate/sheet, strip, and foil, which account for the majority of China's overall exports of aluminium semis, reported a drop in foreign orders. The cost pressure on international aluminium processing companies was relieved due to the sharp decline in the price of aluminium ingots, which encouraged them to increase output. The competitiveness of Chinese aluminium semis has declined. As a result, it is anticipated that China's exports of aluminium semis might decrease month over month in June.