China issues fourth batch of aluminium scrap quotas for 2020 allowing 100 tonnes

China’s environmental authorities on Saturday, March 7, announced the fourth batch of aluminium scrap import quotas for 2020, which would allow 100 more tonnes of high-grade aluminium scrap to China. With this quota, the total aluminium scrap import allowed for this year comes to 284,549 tonnes.

The volume of import quotas so far stood 87.5 per cent higher than the actual imports in the fourth quarter of 2019, but 14.2 per cent lower than the actual imports in the first quarter of 2019.

After the decline in aluminium scrap import quotas in the fourth quarter of 2019, shortage of supply took place and kept aluminium scrap prices at high levels till the 2020 Chinese New Year holiday. The holidays in the secondary aluminium sector extended due to the Coronavirus outbreak, with production suspension at small-scale recyclers. This further reduced the scrap supply and kept bolstering high prices post-holiday.

 SMM anticipates aluminium scrap prices to face some headwinds in the coming weeks as downstream demand has seen a hit by the virus outbreak. The combination of poor demand and slow inflow of seaborne materials is likely to keep prices of ADC12 aluminium alloy ingot, a type of finished product of secondary aluminium, under pressure in the near term. Also, declines in aluminium prices are likely to restraint aluminium scrap prices from growth.

According to SMM estimates, China’s aluminium scrap imports for 2020 could halve from a year ago.

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