China's imports of aluminium scrap rose 7.4% YoY in August, likely to drop in September due to import quotas

According to the data from China Customs, in the month of August, China's imports of aluminium scrap rose 7.4% YoY and stayed almost flat month on month to stand at 141,000 tonnes.  This is the first month after the implementation of import quota on high-grade aluminium scrap in China.

Imports were high in August as the volume import quotas from July to September for the so-called Category Six aluminium scrap of higher Al grades matched the realised imports during the same period of 2018. Import was further boosted by the price advantage of overseas aluminium scrap over domestic scrap, which was higher because of tight environmental restrictions.

China's imports of aluminium scrap may drop in September on rising concerns about lesser quota volumes to be granted for the fourth quarter 2019. As reported by Argus Media, China Solid Waste and Chemicals Management approved a combined 66,368 tonnes of copper, aluminium and ferrous scrap for Q4. The quota for aluminium scrap stood at 32,940 tonnes.

According to customs data, imports of unwrought aluminium alloy reached the highest since 2018 and stood at 16,008 tonnes, up 27.9% month on month and 143.3% YoY.  Significant prices advantage of seaborne secondary aluminium ADC12 boosted imports of unwrought aluminium alloy since June. 

A tight aluminium scrap market driven by potential lower quotas for the fourth quarter will continue to push up prices of domestic secondary aluminium. This will prompt Chinese importers to depend more on unwrought aluminium alloy from overseas during September-November period.