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China Add The Import Tariff For Aluminum Scrap, How It Effects The China Aluminum Market
Mar 26, 2018

In March 8, 2018, President Trump signed the 232 survey results based on the announcement, finds imports of steel and aluminum products threaten U.S. national security, global import tariffs will be levied from March 23rd onwards, import tariffs on steel, aluminum products were 25% and 10%, but in Canada, Mexico and other countries to be exempted. On the morning of March 23rd in Beijing, President Trump formally signed the memorandum of trade with China at the White House, announcing that it would be possible to impose tariffs on the 60 billion US dollars imported from China and limit the investment and acquisition of Chinese enterprises to the US. Trump said at the same time: "this is just the beginning."

China began to take action against the trade restrictions adopted by the United States. The morning of March 23rd, the Ministry of Commerce issued a China suspended in the United States imports of steel and aluminum products 232 measures of reduction product list and public comment, intends to levy tariffs on imports from the United States and some products, in order to balance the interests of China due to the United States to cause loss of tariffs on imported steel and aluminum products. The list includes 7 categories, 128 tax products, the export of $3 billion relates to the United states. The first part of a total of 120 tax, quasi tariff levy 15%; the second part of a total of 8 tax, quasi tariff levy 25%, including scrap. The Ministry of Commerce said that if China and the United States failed to reach a trade compensation agreement within a specified time, China would exercise the right of suspension and reduction of the first part of products, and further assess the impact of the US measures on China, and implement the second part list.

Chinese is the world's largest producer of recycled aluminum, aluminum raw materials required in part from import. China according to customs statistics, in 2017 Chinese imported scrap 2 million 170 thousand tons, of which, since the United States imports 476 thousand tons, imports amounted to $630 million, accounting for 22% of the number of.

The United States aluminum industry started earlier, accumulated a huge amount of domestic aluminum, aluminum resources are very abundant. According to the relevant statistics, in 2016 the United States recycled aluminum production of about 4 million 210 thousand tons, of which 44% from the old scrap recycling. Except for domestic use, the United States also exports a large amount of scrap, is the world's largest exporter of aluminum scrap. According to the International Trade Organization statistics, in 2017 the United States exports scrap 1 million 525 thousand tons, the amount of $2 billion 250 million, accounting for more than 16% of the total global scrap export trade. Chinese is the largest destination for American exports of scrap in 2017 from the United States, China scrap imports accounted for 31.2% of the total exports of U.S. scrap.

Considering the factors such as the implementation of the United States, if Chinese from scrap to levy 25% import tariff, we estimate from the United States in 2017 China scrap imports will be reduced by about 350 thousand tons, according to the estimated 80% aluminum, accounting for less than 1% in the total supply of aluminum China.

Scrap consumption, China's imports of scrap for automotive section of old scrap, mainly used for the production of recycled aluminum casting alloy. Because our country allows the processing trade of aluminum alloy to be exported, and impose a 15% export duty on the general trade export, therefore, the export of China's aluminum alloy is mostly the casting aluminum alloy exported by processing trade. In 2017, China exported 536 thousand tons of aluminum alloy, of which 533 thousand tons of exports were exported, accounting for 99.2% of the total export, and only 977.5 tons of exports to the United States. Therefore, it can be considered that the effect of this measure on the export of aluminum alloy in China is negligible.

The number of Aluminum Alloy, compared Chinese imports from the United States and scrap exports to the United States we think of imports from the United States scrap import tariffs, have a substantial impact on the overall market supply and demand pattern will not Chinese aluminum.