China's aluminum imports to fall in 2018

China’s aluminum scrap imports from the United States are set to drop by around 24 percent this year in the wake of tariffs placed on the material by Beijing.

China's aluminum imports to fall in 2018

While Chinese aluminum companies now face the same tariff obstacle as other exporters to the United States, they appear better placed to benefit from some of the (most likely) unintended consequences of the Trump administration’s policies.

The Trump tariffs and measures against major Russian producer Rusal, along with a strike at Alcoa’s alumina and bauxite operations in Western Australia are combining to roil aluminum markets.

Throw in Trump’s move to double the tariff on aluminum from Turkey and the result is a market that was most likely in a small supply deficit this year is now more concerned about the risk of supply disruptions.

Rusal, which produced 1.87 million tonnes of aluminum in the first half, is a major supplier not only to the United States, but also to other countries around the world.

It is reportedly concerned that it will have to halt production or stockpile output if an agreement on U.S. sanctions against it cannot be reached.

The Trump administration has given Rusal’s U.S. customers until Oct. 23 to end their business with the Russian company.

If no deal is reached to extend, or amend, that deadline, the aluminum market is likely to face severe disruptions as Rusal’s output is blocked from world markets.

The Trump tariffs are also hurting the U.S. aluminum producers they are designed to help, with Alcoa asking for an exemption from the tariffs because it imports essential aluminum products from its facilities in Canada.

Alcoa said in July it will incur as much as $14 million a month in extra expenses, mainly from tariffs levied on aluminum imported from Canada, its biggest supplier.

If Rusal is largely blocked from the global aluminum market, and if strikes do translate into supply disruptions, there are very few producers currently able to take advantage.

source: Reuters

Last Mod: 14 Ağustos 2018, 12:40
Add Comment