November 17, 2021 – China’s net alumina import volume so far in 2021 has been around 2.59 million tonnes. This means that the Asian country remains one of the world’s most important buyers of the aluminium raw material. The automotive industry with its deferred steel demand is likely to ensure further steel price increases in 2022. This should also keep coil prices high.
China remains an important net importer of aluminium
Despite the significant increase in ocean freight costs, China remains one of the world’s largest importers of alumina. Cumulative net imports from January to September 2021 stood at 2.59 million MT of alumina.
Currently, China is expected to import a total of about 3.5 million MT of the aluminium raw material in 2021. And it will also cover its alumina demand overseas in the coming years.
First plateau then rise in steel prices
As we reported earlier, the shortage of semi-conductor chips has led to deferred demand for steel among carmakers. Meanwhile, the industry consensus has become that as soon as more chips become available, demand – especially from Europe and the United States – is expected to increase significantly.
Deferred demand in the automotive industry
Steel prices are currently at a high plateau and will quickly start to rise again as soon as car manufacturers can and have to work at full capacity. The backlog of automotive orders accumulated in 2021 should be huge by now. An additional side effect should also be a significant increase in demand for aluminium for the automotive industry.
The analysts’ current view of the situation in China is very similar to ours. There, the government has extensively reduced production capacities for steel and aluminium in 2021 and will continue this trend. Even though China will remain one of the world’s largest steel exporters, the country has initiated far-reaching reforms that should prevent a steel glut on Asian markets, for example.
High coil prices are here to stay
As other market participants also report, it can be assumed at the moment that coil prices will remain high in 2022. The European mills will not easily give up the confidence they have gained and their increased margins. This can also be seen in the current tariff rate quota deal between the United States and the European Union.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.