China’s ADC12 Aluminum Alloy Export Price Hits New High Since 2008 Due To Scarcity Of Scrap Metal And Transportation Costs

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Strong points

Prices hit new high for third week in a row; crosses the $ 2,500 / mt mark

Stronger auto sales in Japan to keep downstream demand strong

Meeting from December 21 to 23 to discuss the implementation of the scrap import specifications

Singapore –
China’s ADC12 aluminum alloy export price extended its gains on Dec.15 to a 12-year high, amid rising transportation costs, a persistent scarcity of scrap supplies globally and robust downstream demand.

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This is the third week in a row that prices have hit a new high, with S&P Global Platts last valued at $ 2,495-2,515 / mt on December 15th. Prices first crossed the six-year mark on December 1, followed by a mark of the year on December 8.

“The last weeks [price] increase was crazy, “said an international producer, referring to the rampant buying that drove export prices up to $ 300 / mt or 12.4% in one week. This was partly attributed to Japanese traders buying fast cargoes to cover their short positions caused by shipping delays and volatile but rising freight costs.

“[We are] still unwilling to process new orders for March, ”he added, after being fully booked for January and February shipments. demand fundamentals, with scrap suppliers preferring to sell in their home markets, he explained.

This is further compounded by the difficulties of collecting scrap metal during the winter season, market sources said.

Meanwhile, Japanese domestic demand for imported ADC12 materials remained robust as consumer confidence recovered from April lows, pushing the country’s auto sales volume to rebound sharply in the second half of the year. year – the area that accounts for the majority of ADC12 use.

“The demand for ADC12 in Japan is very strong now, [but] the offer is very limited. In Japan, we cannot meet the demand of domestic foundries [alone], and generally our country buys about 30,000 tons [of material] of China per month, ”said a Japanese trader. “But currently, only 6,000 tonnes come from China,” he added.

The latest data released by the Association of Japanese Automobile Manufacturers on December 4 showed that total auto sales reached 411,601 units in November, 1.2 percent higher month-on-month and 6.7 percent higher than ‘at the same time a year ago.

“At the moment, our company has enough material to cover our customers [and] we don’t rush to buy material, ”the Japanese trader said.

Elsewhere, Chinese producers have continued to fight imports of recycled die-cast aluminum alloy raw materials, even though import quotas are no longer required, as they must meet specific standards implemented by the Ministry of Ecology and Environment from November 1.

“I have heard of imports of scrap metal under the [old] system based on quotas, but none under the new regulations]”, said a Chinese producer responsible for importing raw materials.

Japan’s leading trader said, “I’ve heard that some foundrymen have successfully imported equipment into China under the new regulations, [but] a Chinese customs inspector said [they] need a much cleaner material. “He also said,” We don’t know what a much cleaner material is. “

Meanwhile, the Ministry of Ecology and Environment will hold a technical specification meeting in Haikou city from December 21 to 23, to discuss the implementation of the new standards “Aluminum alloy raw materials recycled molded “, to further clarify the confusion.

“It’s hard to say, but the situation of scrap imports should improve [following the meeting]”, said the first Chinese producer.

Shanghai Futures’ first month aluminum contract closed at 16,435 yuan / mt ($ 2,511 / mt) on December 15, 125 yuan / mt ($ 19 / mt) higher week after week. Meanwhile, its counterpart on the London Metal Exchange, the three-month aluminum spot contract, closed at $ 2,054 / mt on December 14, or $ 35.5 / mt over a week to the other.


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