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The impact of RCEP on China's import and export of aluminum raw materials
China has relatively scarce aluminum resources, and its dependence on imported bauxite is continuously increasing,
China has a relative shortage of aluminum resources, with a continuously increasing dependence on foreign bauxite, and annual bauxite imports exceeding 100 million tons. RCEP member countries account for a large proportion of bauxite imports, and Guinea has become the largest source of bauxite imports for China currently.
Except for the special circumstances in 2018, China has also been a net importer of alumina. Although alumina imports have shown a downward trend, annual imports still remain around 2 million tons. Australia is the main source of imports, and together with Vietnam and Indonesia, the sources of metallurgical-grade alumina imports are mainly within RCEP member countries.
Theoretically, if we consider the possibility of exporting countries imposing export restrictions on resource commodities, RCEP provides some protection for domestic imports of bauxite and alumina. However, currently, there are no import barriers.
The import and export volume of primary aluminum is usually not large. In 2020, however, long-term import profitability occurred, leading to a significant increase in primary aluminum imports during the year. Due to the absence of import tariffs, overseas primary aluminum can freely enter the domestic market. Russia and India are the largest sources of imports, while Malaysia and Vietnam are the main sources among RCEP member countries. Some imports from Japan, South Korea, and Singapore are mainly re-exports. RCEP has essentially no impact on primary aluminum imports; domestic and international aluminum prices regulate the import volume.
Domestic imports of scrap aluminum are also considerable. Due to the lack of a relatively complete scrap aluminum recycling system in China, the supply and demand of domestic scrap aluminum are severely mismatched, resulting in considerable dependence on scrap aluminum imports. The main sources of scrap aluminum imports are developed countries such as those in Europe and America. Although a considerable portion of scrap aluminum has come from Southeast Asian countries such as Malaysia in recent years, this is mainly because of the higher import standards for scrap aluminum in China, with domestic buyers shifting the preliminary processing stages such as sorting to Southeast Asia. With the implementation of the new policy on the import of waste metals in November of a given year, scrap aluminum imports have become increasingly standardized. While the signing and implementation of RCEP will not have a direct impact on scrap aluminum imports, it will have a positive role in maintaining smooth import trade.
In terms of raw material exports, currently, apart from the export of refractory bauxite, there is basically no export of bauxite used in smelting. Alumina exports are also mainly non-metallurgical grade, such as for refractory materials, and there is basically no export of scrap aluminum, except for a small amount of re-export trade. Therefore, even if export tariffs are lowered, there will be no increase in the export of bauxite, alumina, and scrap aluminum. Regarding electrolytic aluminum, China currently imposes a high export tariff of 15%. If the export tariff is lowered or canceled, or if the channel for domestic primary aluminum to flow overseas is opened, even without the tariff, the current export of primary aluminum is at a significant loss. Therefore, adjustments to tariffs will not fundamentally change the current situation.
Therefore, RCEP has essentially no direct impact on the import of bauxite, alumina, ordinary primary aluminum, and scrap aluminum in China. However, it is undoubtedly beneficial to the smooth and stable flow of this import and export trade.
aluminum,primary
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