August 5, 2021 – China is increasingly reliant on aluminum imports and has become a net importer of aluminum over the past year. A trend that continues apace, prompting questions about whether the Chinese government will next tighten the thumbscrews on aluminum export rebates. High demand for nickel premiums expected in the fourth quarter. Aluminum premiums in Europe and US to rise. High-carbon ferrochrome production in China slumps dramatically.

Stainless Espresso: China increasingly reliant on aluminum imports
Stainless Espresso: China increasingly reliant on aluminum imports

China needs more aluminum imports

As reported by Reuters agency, China has already imported more than 740,000 tons of primary aluminum in the first months of 2021. If last year it was still assumed that the increasing Chinese aluminum imports would be a short-term phenomenon, it is now slowly becoming clear that the need for imports will not decline for the time being.

Aluminum in short supply in China

In addition to the extremely high domestic demand, there are also energy cuts that have already cost hundreds of thousands of tons of aluminum production in China in 2021.

Also the attempt of the Chinese government to reduce the high prices with a sale of 140,000 tons of strategic aluminum reserves was rather with moderate success. Neither the prices fell nor did it change anything in the tight supply.

Are Chinese export rebates on aluminum now falling?

Chinese aluminum exports currently still qualify for tax rebates. Looking at the levers China has pulled on steel in recent months, it is reasonable to wonder when Beijing will tighten the thumbscrews on aluminum to keep much-needed raw materials in the country.

Nickel premium prices remain at a high level

Nickel premium prices remain at high stable levels. Currently, the market in the United States and Europe expects demand to increase significantly in the fourth quarter of 2021.

US and EU aluminum premiums up

On August 4, 2021, aluminum premiums for EU and US continued to increase. In the United States, aluminum premium duty paid US Midwest closed at around $661 and aluminum premium duty unpaid European closed at around $297. On the LME, aluminum futures were already further up this morning at around $2,574.00 per ton.


High-carbon Ferrochrome Output Fell Sharply Amid Power Restrictions

According to statistical data, high-carbon ferrochrome production in the first half of 2021 in Inner Mongolia has fallen by nearly 50%. The background is the power cuts due to lack of supply. This has caused ferrochrome prices to skyrocket. Currently, prices of up to $17,400 per ton of high-carbon ferrochrome are being called on the Chinese spot market.

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