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China

Effective from June 10, China’s General Administration of Customs has announced inspection enforcement on recycled raw material imports, including recycled steel, copper, brass and aluminium alloys.

With Malaysia’s countrywide lockdown continuing into its second month and with tight import controls at Chinese ports, consumers in China are reporting tight supply of both secondary aluminium and copper units. After the commodity trading index reached a 13-year high, China announced that it would auction batches of state reserves of copper, aluminium and zinc to domestic manufacturers and consumers for the purposes of cooling down the post-pandemic price surge.

Data show that operating rates among China’s secondary aluminium smelters remain at lower levels - with an average of below 60% for May, which is down from the previous month but higher year on year. The semiconductor shortage is one of the contributors to this downward trend.

While global GDP growth is expected to be 5.6% this year, the World Bank upgraded the forecast for China from 7.9% to 8.5%, and then a couple of weeks later to 8.7%. One of the main contributing factors is post-COVID growth.

According to a China Passenger Car Association publication, new energy vehicle sales exceeded one million units in the first six months of 2021 and are expected to reach 2.4 million by the end of the year. Meanwhile, total passenger car sales dropped 5% to 1.6 million units in the opening half of the year.