January 14, 2019 / 4:40 AM / 7 days ago

UPDATE 1-China 2018 aluminium exports rise 20.9 pct to record yearly high

* China 2018 aluminium exports at 5.8 mln T - customs

* Dec shipments at 527,000 T, down 0.6 pct from Nov - customs

* Exports have topped 500,000 T for six of last seven months

* Outlook for 2019 depends on U.S.-China trade talks - analyst (Adds analyst comment, graphic)

By Tom Daly

BEIJING, Jan 14 (Reuters) - China’s aluminium exports in 2018 rose 20.9 percent from a year earlier to a record high, according to customs data released on Monday, as sanctions by the United States on Russian producer Rusal spurred demand for Chinese metal.

The world’s top aluminium producer exported 5.8 million tonnes of unwrought aluminium and aluminium products last year, the General Administration of Customs said, despite a 10 percent tariff on aluminium imports into the United States imposed in March.

Shortages caused by the U.S. sanctions on Russia’s United Company Rusal, announced in April, led to a spike in international aluminium prices, allowing Chinese suppliers to cash in and fill the void.

Separate U.S. duties on Chinese aluminium products such as foil and alloy sheet also failed to dent overall exports.

In December, exports dropped 0.6 percent from the previous month to 527,000 tonnes but were up 19.8 percent year-on-year, the customs data showed.

Exports in November, the first month that shipments of semi-fabricated aluminium from China could receive a higher 16 percent value-added tax rebate, were revised to 530,000 tonnes, the second-highest on record.

“The arbitrage narrowed a lot in December for sure,” said Jackie Wang, an aluminium analyst at CRU in Beijing, referring to the difference between domestic metal values versus overseas prices.

Benchmark three-month aluminium prices on the London Metal Exchange fell by 5.7 percent in December, the steepest monthly drop since June, as the United States said it would withdraw the Rusal sanctions. This lowered the incentive for Chinese producers to ship metal overseas.

Exports have now topped 500,000 tonnes for six of the last seven months. However, Wang said whether they could keep up the momentum depended on if the United States went ahead with a planned increase in tariffs on Chinese goods, from 10 percent to 25 percent, in March.

“For Chinese producers, a 10 percent tariff is tolerable, but if it is increased to 25 percent that will be another story,” she said.

The tariffs affect a range of finished goods that include aluminium, which could impact production in China, Wang said.

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Reporting by Tom Daly; Editing by Christian Schmollinger

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