One of the most popular questions we have been getting recently is, will China export more aluminium into the growing supply gap in the Rest of the World (RoW)?
It is well known that China imposes a 15% tariff on the export of raw metal, while semi-finished metal earns a refund of VAT, reducing the cost and making it more competitive in foreign markets. So the popular wisdom is that if China increases exports, it will be in semis.
And this is true. But those of you alert enough, will notice that the heading of this post does not carry a question mark.
The key to increasing exports of both raw metal and semis is … liquid metal.
Operational people will tell you that liquid metal is a great cost saving for both the smelter and its downstream customer. Instead of the smelter having to process metal through the cast house, alloying the metal, cooling it, packing and shipping it to the customer, simply send a crucible full of metal at 600° C plus to the factory. It then also save the downstream factory from the cost of reheating the metal. Provided the factory has spent some money on receiving the metal in liquid form, it saves that factory a lot of money on energy.
And liquid metal is how to export raw metal in the guise of a semi finished product. Simply pour the hot metal into a continuous caster, run the metal one pass through a rolling mill and roll it up into a coil. It is now a semi finished good, ready for export as 99.7% pure aluminium. albeit not in a 25kg form as is usually the case.
We at AZ China will be bringing more information on this to our clients and subscribers. Make sure you are on the list. Contact us at blackchina@az-china.com.
Comments
So what your saying Paul, is that we are going to see Liquid metal trucks going into the newly established FTZ in Shanghai (Or other FTZ areas to be established in China) therefore allowing the export of raw Aluminium.
Thanks for the question Mark. No, I am saying that it is already happening via existing rolling mills. As a rolling alloy it would be called 1100 alloy, but you only need to put one pass into the metal. To answer your point, you can transport a crucible of liquid metal some 100’s of kilometres, but I can’t think of any smelter close enough to Shanghai to do that. And why would you, since once it is in coil form, you can then ship the metal much more easily.