Reverse trade patterns see China buying steel, aluminum

Most often thought of as an exporter of finished and semifinished metal, in the summer of 2020 China has been finding itself importing metal from other parts of the world.

Peru-based steelmaker Corporación Aceros Arequipa has announced the sale of a 40,000 metric ton cargo of billets to China in early June for August shipment. “The ship is finishing loading right now,” the company’s Diego Arrospide Benavides told Recycling Today  Aug. 17, adding the billets are expected to arrive in Jiangyin, Jiangsu Province, China, “by the end of September.”

The company states, “This marks the first time that Aceros Arequipa exports any of [its] produced steel across the Pacific. As Aceros Arequipa expands [its] production by firing up in the first half of 2021 its new and larger furnace, this first export cargo could signal a new era in the Peruvian steel producer portfolio.”

It fits the pattern reported by S&P Global Platts for the month of June, with Chinese government statistics indicating the nation was a net importer of around 700,000 metric tons of steel that month.

Manufacturers in China also are importing significant amounts of copper cathode and ingot, and the nation also was a net importer of finished and semi-finished aluminum in July.

According to a Reuters news item, China’s General Administration of Customs (GAC) has reported July aluminum imports of more than 390,000 metric tons, a figure that represents a “nearly sevenfold year-on-year” increase.

With China having exported less than 375,000 metric tons of aluminum in July, it marks the first time the nation has been a net importer of the metal since 2009, according to Reuters.

On the metals demand side, China’s government has been funding infrastructure investment in its post-COVID-19 recovery process at a much higher level than governments in other parts of the world.

Also potentially tying into the phenomenon are strains on the scrap metal supply side. As China bans or limits volumes of imported scrap metal (and paper), it has caused capacity rates at aluminum, copper and brass mills to remain muted despite the economic recovery and infrastructure spending boom.