BEIJING (Reuters) - China’s aluminum exports rose to their highest in almost 3-1/2 years in May, as a favorable price arbitrage saw more shipments overseas despite U.S. tariffs, while steel exports were the most since July 2017, helped by a recovery in global demand.
China is the world’s biggest producer of steel and aluminum, which have both been subject to 25 percent and 10 percent import tariffs, respectively, in the United States, the world’s largest economy, since March 23.
Unwrought aluminum and aluminum product exports came in at 485,000 tonnes last month, China’s General Administration of Customs said on Friday. [ACNEXPALUM]. That’s the second-highest figure in customs’ records, behind only the 542,700 tonnes exported in December 2014.
Shipments were up 7.5 percent from 451,000 tonnes in April and up 12.8 percent from 430,000 tonnes in May 2017.
Steel product exports came in at 6.88 million tonnes for May, customs said, up 6.2 percent from 6.48 million tonnes in April but down 1.4 percent on a year ago.
The numbers showed China’s aluminum exports were holding up “against the odds,” amid the U.S. import tariff and other U.S. duties on Chinese aluminum foil, said Paul Adkins, managing director of consultancy AZ China.
This was largely thanks to higher London aluminum prices after U.S. sanctions on Russian producer United Company Rusal, he noted.
“You had the bounce with the Rusal sanctions and the metal price getting up to $2,700 [a ton], so there was always that opportunity,” to export, he said. “It also comes at a time when they can’t export foil and the 10 percent tariffs.”
Last month also saw Washington slap steep import duties on steel products from Vietnam that originated in China, while Canada initiated a preliminary dumping inquiry into steel imported from China, South Korea and Vietnam.
Kevin Bai, an analyst at CRU in Beijing, said the steel export numbers were broadly in line with his forecast.
“This export volume is still not a very significant level compared with the past peaks so this indicates that the domestic steel industry is still doing great. The profitability of domestic steel mills remains quite high,’ he said.
“I think the gradual increase may be because the demand in the overseas market is recovering, but still not comparable with the better performance in the domestic market.”
Reporting by Tom Daly and Muyu Xu; additional reporting by Manolo Serapio in MANILA; editing by Sunil Nair and Richard Pullin