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16 MAY 2018 AL CIRCLE

Secondary aluminium alloy export prices estimated to surge on tight supply in the market: SMM updates

EDITED BY : DEBANJALI SENGUPTA 2MINS READ

According to Shanghai Metal Market, secondary aluminium exports prices in China are likely to surge further in a short period of time as a resultant of month-long operation suspension of China Certification and Inspection Group (CCIC) at North America in May, which would significantly lower the aluminium scrap imports from the US and shrink secondary aluminium exports as a consequence.

Since May 4, the authority has imposed broad-based inspections on all scrap materials imported from the US and put CCIC’s operations at North America under A-level risk alert for one month, thereby, affecting China’s ability to import adequate scrap from the US.

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About 50,000 tonnes of aluminium scrap imports have been anticipated to be affected by this move in May learned Shanghai Metal Market.

In this background, Zorba mixed aluminium recycling imported price is hovering at RMB 1500 per tonne as on 16th of May, 2018. The price has been continuing to remain unchanged since 16th of April, 2018 after it dwindled right from RMB 1600 per tonne, which was attained on 12th of March, 2018 and continued to remain same till 13th of April, 2018.

Aluminium scrap imports from the US account for the majority of raw materials for China’s secondary aluminium exports as such exports could avoid China’s 15% tariffs for aluminium exports as well as 25% tariff on aluminium scrap imported from the US.

However, most of the secondary aluminium exporters have taken a watch-and-wait approach and turned cautious at taking export orders despite an alternative of adopting the certificate issued by CCIC Hongkong. Shanghai Metal Market thus, estimates that around 70% of export orders would be cut as a result.

The prices of ADC12 aluminium alloys that are exported to Japan have also surged from US$1,950 per tonne to US$2,070 per tonne on Friday, May 11, 2018, due to the tightened secondary aluminium export supply.

Given the uncertain trade conditions between China and the US, we expect the prices of secondary aluminium exports to go up further.

However, prices of secondary aluminium for the domestic market saw little impact due to the sluggish downstream vehicle consumption.


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EDITED BY : DEBANJALI SENGUPTA 2MINS READ

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