China is imposing 5pc tariffs on aluminium and copper scrap imports beginning December 15, 2019.
The move, initially announced in late August, is the latest escalation in a trade war that’s seen import quotas and restrictions impacting China-bound US exports this year. Imports in October totaled 6.6mn kg (6,600mt), 85pc below the peak month of May when imports totalled 44.8mn kg.
To compensate for its diminished imports and aluminum scrap needs, China is purchasing more RSI, shifting the supply chain for aluminium scrap in the RSI-producing countries. The US has redirected its scrap exports to India.
India has seen the most significant gain, as it welcomes scrap once bound for China into its ports. Monthly Indian imports rose 49pc from 16.6mn kg to 25mn kg, and comparing the first four months of 2019 with the last four months imports rose 15pc.
This level of activity has strengthened prices for US export grades of aluminium, but it’s left the comparatively weaker domestic market reeling with lower rates.