China issues third batch of aluminium scrap import quotas allowing 1,440 tonnes

China’s environmental authorities on Wednesday, February 5, reportedly issued the third batch of aluminium scrap import quotas for 2020, which would allow 1,440 tonnes of high-grade aluminium scrap to enter China. This brought the total aluminium scrap allowed for imports to China to 284,449 tonnes so far this year.

SMM data showed that China in Q1 2019 had imported 332,000 tonnes of aluminium scrap, but this year the total quotas for Q1 are less likely to exceed 300,000 tonnes, even if more quotas are issued ahead.

This may result in a tight supply of aluminium scrap in China in the second quarter of 2020. Throughout the year, China’s aluminium scrap imports are widely expected to halve from last year.

However, in February, the country is expected to see improved availability of aluminium scrap, as the secondary aluminium producers are delaying to restart operations after the Chinese New Year Holiday, due to coronavirus outbreak.

According to the SMM report, most of the secondary aluminium producers will reopen in the second week of February, while those in Hubei and Zhejiang will further delay their resumption.

Also, as people are deferring to re-join work, operating rates at secondary aluminium producers are most likely to stand lower, resulting in poor demand for scrap.