China's surge in aluminum import shows global disconnection
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Update time : 2020-09-07 16:12:24
As the world's largest aluminum producer, China has imported more aluminum than export in July, which is rather rare. The last time that China became a net importer was in 2009.
The current aluminum trade deficit is mainly attributed to some factors. An open arbitrage window between the Shanghai Futures Exchange (ShFE) and London Metal Exchange (LME) attracts such metal into China, where the manufacturing industry is recovering, and infrastructure is heavily dependent on metals.
However, the scrap and alloy of the global supply chain are undergoing adjustments. For a long time, China's alloy has a trade surplus. However, China became a net importer of alloys in December last year.
At present, China's largest alloy suppliers are Malaysia, South Korea, and India. Meanwhile, these countries have become the main destinations for aluminum scrap because the requirements for purity of import aluminum scrap in China are going strict.
China and its dominant position in aluminum are facing a deglobalization trend. The current disconnect in China's aluminum trade might go soon, or come with a greater one.
