Higher Chinese aluminum and steel exports

China imported large quantities of raw materials in September. At the same time, the country has also exported larger quantities again. According to data from the customs authorities, exports of aluminium and aluminium products rose by almost 8% to 426 thousand tonnes compared with the previous month. This was already the third consecutive monthly increase. However, exports were still slightly below the level of the previous year. Nevertheless, at first glance this indicates that foreign demand for Chinese aluminum is picking up.

However, if we look at the price development of aluminum on the LME and SHFE in September, the LME price fell more sharply than the SHFE price last month. This would have been more in favor of more aluminum remaining in China. Apparently China produces significantly more aluminum than it consumes itself - new data on this will be published next week - so that the higher exports also point to weaker domestic demand. To counteract the flood of aluminum products from China, the EU today introduced punitive tariffs on Chinese aluminum extrusions, as announced in September. In addition to aluminum, China again exported slightly more steel products in September than a month earlier. However, exports remained at a relatively low level at a good 3.8 million tons. Nevertheless, this indicates a more hesitant demand for steel in China, especially as stocks of hot-rolled steel and reinforcing steel have increased in recent weeks. It remains to be seen to what extent demand will pick up again after the holiday week.

Source: Commerzbank Research, Photo: Fotolia