China is likely to remain a net importer of primary aluminium throughout the year but will be supported by rising exports of aluminium products.
China is likely to remain a net importer of primary aluminium throughout 2008 that will be primarily supported by surging exports of aluminium products, as reported by RESOURCE INVESTOR.
During January to April 2008, China imported about 48,993 Tons of primary aluminium, a decrease of nearly 9% over January to April 2007, whereas it exported around 22,080 Tons of primary aluminium, a YOY drop of about 70%. This shows net imports of about 26,913 Tons in the first four months of 2008. China has been a net primary aluminium importer since October 2007.
The imposition of export tax on primary aluminium is leading to a drop in its export and this resulted in a decline in prices of domestic aluminium much lower than the prices of spot aluminium on the LME (London Metal Exchange). The decline in aluminium export is discouraging the manufacturers from producing huge amount of aluminium because of a rise in its production cost. Thus, manufacturers prefer to import aluminium instead of producing it.
Moreover, to conserve energy and control pollution, China is encouraging more import of primary aluminium and curtailing its production. However, the imports are still low in comparison to total production of primary aluminium in China.
Furthermore, the demand for aluminium is increasing in the country but the supply is not adequate to fulfill the demand of domestic market and thus, China is likely to remain net importer of aluminium in 2008.
But Yang Dongshen, the analyst for Hong Kong-based futures brokerage Gartlett Investment, said that due to rapidly increasing price gap, imported aluminium is expected to be not used for consumption in the country, but for producing products like aluminium pipes for export.
A Senior Research Analyst at RNCOS said, “Due to rise in the demand for export products, the situation of aluminium imports is likely to remain same in China. Also, the volume of imports of primary aluminium is lower than the total supply of aluminium in China and increase in volume of primary aluminium import is not likely to influence the domestic market of the country.”
Related Market Research Reports:
European Aluminium Market Analysis
US Aluminum Market Analysis
China Steel Industry Forecast till 2012
