Aluminium scrap sees tighter supply in 2018
Aluminium scrap is set to see tightened supply in 2018 as environmental protection policies weigh in further. SMM believes such tightness would be mostly felt around Chinese New Year and the fourth quarter when demand increases.
In fact, secondary aluminium producers have started restocking ahead of the Chinese New Year holiday but their inventory levels hardly grew. Sources told SMM that their stocks could last just seven to 10 days of production.
The tightening supply of aluminium scrap is mainly due to environmental protection measures and policy changes on imported materials.
Last year, construction activities were limited on account of air pollution. Aluminium scrap supply from dismantling and construction activities therefore reduced especially as the heating season started.
In addition, policies such as cancellation of agents for imported aluminium scrap, requirements on increasing metal content in scrap material imports, and ban on imported aluminium scrap in category seven have all contributed to less availability.