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US aluminium scrap sector rocked by Chinese announcement

China – There are fears in America that China’s intention to impose a 25% import tariff on US aluminium scrap could be extended to other forms of scrap.

Following the decision by US president Donald Trump to introduce tariffs of 25% and 10% on, respectively, steel and aluminium imports, the Chinese government has said it will respond with a 25% import tariff on US-origin material corresponding to Harmonized Tariff Code 7602.00 – Aluminum Waste and Scrap.

‘In 2017, the United States exported more than US$ 1.1 billion worth of aluminium scrap to China, which has been in a positive trade balance for more than a decade,’ comments the US Institute of Scrap Recycling Industries (ISRI). ‘The Chinese government’s announcement will impact this significant US scrap export, spurring concern that exports of additional scrap commodities could be impacted in future announcements.’

The move by China ‘may well exacerbate the disparity between primary and secondary aluminium prices’, according to ISRI. Immediately following the announcement, experts have been forecasting significant price falls for Zorba and Twitch.

Last year, the USA supplied around half of all the aluminium scrap imported by China – a flow that accounts for nearly 25% of the entire world’s trade in this commodity, ISRI points out.

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