China allows 191,000 tonnes of aluminium scrap in its fifth batch of import quotas for 2020

China’s environmental authorities on April 10 reportedly issued the fifth batch of aluminium scrap import quotas for 2020 to allow additional 191,100 tonnes of high-grade aluminium scrap to enter China. With this, the total aluminium scrap imports allowed to China at present is 475,600 tonnes.

China, in the first two months of the year, imported 122,000 tonnes of aluminium scrap in total, down 40.7 per cent from a year earlier, according to customs data. This suggests that a large amount of import quotas has remained unused.

According to China Customs data, China, during January-April 2019, had imported 490,000 tonnes of seaborne aluminium scrap.

The import quotas for this year are so far sufficient in volumes, but the supply in Chinese market is unlikely to increase soon due to subdued consumption and supply disruptions amid the worldwide spread of the COVID19.

Chinese companies have also adjusted their import pace based on the demand and consumption of secondary aluminium within the country and outside.

Chinese authorities estimate that since the spread of the COVID19 has not shown signs of slowdown, the continued virus crisis in April may further impact the production of aluminium scrap and deliveries to China, and may also threaten to disrupt the supply chain.

However, the tight supply in China has not let the aluminium scrap prices to record sharp declines, while, on the other hand, the prices outside China has declined with the sluggish demand due to the pandemic. This downward trend may continue before the effective containment of the virus.

In the near term, SMM expects the inflow of imported cargoes to rise in China, resulting in a decline in domestic prices of aluminium scrap and aluminium alloys (ADC12).