Chinese export of primary aluminium and semis surged in December before Section 232 ruling

Chinese customs released the import and export data on refined copper, primary aluminium, and other base metals in December 2017. According to the report China imported 6,659 tonnes of primary aluminium in December 2017. This registered a 90.40% drop YoY. The amount is however more than 6,173 tonnes of import in November 2017.  For the full year 2017, China exported 116,234 tonnes of primary aluminium, which is also 41.22% less than the amount in 2016.

As for exports of the primary aluminium are concerned, China exported 248 tonnes of the metal in December 2017, about 1% decline from the amount in December 2016. The amount is however, more than 126 tonnes of aluminium exported in November 2017.  For the full year 2017, China exported 14,315 tonnes of primary aluminium, a drop of 15.35% YoY.

According to Shanghai Metals Market, Chinese exports of semi-finished aluminium products surged 60,000 tonne to 440,000 tonne in December, as domestic firms boosted production and exports in order to deliver before the Feb 1 ruling of the US Department of Commerce's investigations on anti-subsidy practices. 

Top U.S. producer Alcoa said this month the administration’s condemnation of cheap Chinese aluminium is helping resolve overcapacity in the Asian country even before any measures are implemented. However, analysts are of the view that imposing a tariff on primary aluminium alone would be harmful for U.S. semi manufacturers, since they would not be able to compete with cheap Chinese semi-finished aluminium products if domestic primary aluminium becomes more expensive.

According to Goldman Sachs Group “A tariff that applies only to China is likely to cause other countries to increase exports to the U.S.”

“The net impact would be higher LME prices, lower SHFE prices, and higher physical premium in both the U.S. and other countries. Alternatively, the Section 232 tariff may extend beyond China.”