China’s aluminum exports hit their highest in nine months in March as strong international prices led the world’s biggest producer to sell more abroad, despite a growing trade spat with the United States.
The impact of a new U.S. import tariff was limited as it only took effect from March 23, traders and analysts said, while China’s exports could rise further in coming months as U.S. sanctions on Russia’s United Company Rusal upend international trade flows.
Unwrought aluminum and aluminum product exports rose 10.2 percent from a year ago to 452,000 tonnes last month, the General Administration of Customs said on Friday, the fourth-highest monthly total on record.
Steel exports, however, fell 25.3 percent last month from a year earlier to 5.65 million tonnes as China curbed production to tackle smog, driving up local prices.
The United States imposed a 10 percent tariff on aluminum imports on March 23 along with a 25 percent duty on steel imports. U.S. President Donald Trump called for the tariffs to protect U.S. metal makers from cheap imports.
March aluminum exports were 22.2 percent higher than February’s 370,000 tonnes, customs said. Steel exports were up 16.6 percent from 4.85 million tonnes in February.
Chinese aluminum prices have been capped by strong supply, likely leading producers to seek better margins abroad where the metal is in demand, said Helen Lau, an analyst at Argonaut Securities.
“You may see more exports from China in April because the global shortage will be worsened,” Lau added, referring to the U.S. sanctions on Rusal, one of the world’s top aluminum producers.
“In case Russia flooded China with its cheap aluminum – as they have no alternative export destinations other than China … then China would have to export,” Lau said.
For steel, prolonged environmental restrictions in some major Chinese steelmaking hubs have curbed supplies after mills were ordered to shut some production to reduce emissions.
Traders and analysts expect more cities to impose restrictive environmental policies as part of Beijing’s campaign to curb air pollution, which may further rein in steel output and support domestic steel prices.
“Prices for steel products in March were much higher than last year, which also dampened the incentives for exports,” said Xu Bo, an analyst at Haitong Futures.
Average spot prices for rebar last month were 3,905 yuan ($620.62) a tonne, compared to 3,743 yuan a tonne in 2017, according to data from consultancy Wind.
Source: Reuters (Reporting by Tom Daly and Muyu Xu; Editing by Christian Schmollinger and Richard Pullin)