Executive Interviews

Asian Metal: Thank you, Mr. Wang, for accepting this interview. To begin with, could you briefly introduce your company?

Mr. Wang: Aili Renewable Resources was established in 2016 and specializes in the recycling, sorting, refined processing, upgrading, and value-preserving utilization of scrap aluminum. We currently operate our own recycling and processing bases in Foshan, Henan, Wuhu, and Tianjin. Our annual scrap aluminum recycling and processing volume is close to 100,000 tonnes, while our Tianjin headquarters has an annual processing capacity of 60,000-70,000 tonnes. Imported scrap aluminum accounts for around 70% of the total volume handled in Tianjin.

Asian Metal: Scrap aluminum covers a wide range of categories. Which types are your company's main products, and what advantages do they offer?

Mr. Wang: Scrap aluminum can be broadly divided into two categories: wrought aluminum alloy scrap and cast aluminum alloy scrap. These two categories each account for approximately half of our business. Over the past two to three years, more domestic scrap aluminum consumers have preferred purchasing tax-included scrap aluminum because many enterprises face difficulties obtaining input VAT invoices. Last year, imported scrap aluminum accounted for about 70% of our total scrap aluminum volume. Its key advantage is that it comes with invoices, making it more attractive to consumers, who generally prioritize purchasing invoiced material.

Asian Metal: After a transition period of nearly two to three years, China's scrap aluminum import policy has become relatively stable. In 2025, import volumes recovered to the level seen before the implementation of the ban on foreign waste imports. Do you think scrap aluminum imports will continue to increase significantly in the future?

Mr. Wang: Based on current trends, I do not believe scrap aluminum imports will continue to increase substantially. First, overseas aluminum supply is expected to remain relatively tight over the next three years, which has resulted in imported scrap aluminum prices consistently exceeding domestic Chinese scrap aluminum prices. This will significantly limit the growth of China's scrap aluminum imports. Over the next three years, I expect China's annual scrap aluminum imports to increase modestly at a rate of around 3% per year.

Asian Metal: Domestic scrap aluminum supply remained tight from the fourth quarter of last year through the first quarter of this year. What do you believe caused this situation?

Mr. Wang: In my view, the primary reason is that the growth rate of scrap aluminum supply has failed to keep pace with the growth rate of consumption. As a result, the market has experienced persistent supply tightness over the past six months. China's vehicle scrappage volume in 2025 was approximately 8 million units, while automobile production reached around 33 million units. This imbalance between scrap generation and consumption has created a supply-demand mismatch. I believe China's scrap aluminum market will remain relatively tight over the next three to five years.

Asian Metal: Do you think the domestic scrap aluminum shortage will worsen or ease during the second and third quarters?

Mr. Wang: I believe the shortage of scrap aluminum will become increasingly severe during the second and third quarters, and it is unlikely to be resolved in the short term. Since the second quarter, overseas scrap aluminum prices have continued to rise and remain above domestic prices due to the conflict between the United States and Iran, resulting in the temporary closure of the import arbitrage window. China normally imports about 1.8 million tonnes of scrap aluminum annually, but current indications suggest imports may decline by at least half this year. This is the primary factor behind the domestic supply shortage during the second and third quarters.

Asian Metal: Under the policy framework of building a unified national market, provinces including Anhui, Jiangxi, Hubei, Henan, Fujian, and Sichuan have gradually abolished tax rebate policies since last year. What impact has this had on the scrap aluminum recycling industry and on your company?

Mr. Wang: Under the guidance of the State Council's policy to establish a unified national market, local governments have gradually withdrawn and abolished preferential tax rebate policies. This means that companies purchasing non-tax-included scrap aluminum can no longer enjoy local tax incentives. From a tax compliance perspective, enterprises will increase the proportion of tax-included scrap aluminum purchases, thereby promoting the gradual standardization and compliance of the scrap aluminum recycling industry. The most direct impact on our company is that an increasing number of enterprises now prefer to purchase tax-included scrap aluminum. Since approximately 70% of our scrap aluminum consists of tax-included imported material, demand from our customers has increased significantly.

Asian Metal: What are your company's future development plans? Are there any new scrap aluminum dismantling or processing projects under consideration?

Mr. Wang: Given the current uncertainty surrounding scrap aluminum policies and the nationwide implementation of reverse invoicing requirements, the operating space for traders will be significantly compressed. To create new profit growth drivers, we plan to expand downstream into the recycled aluminum alloy and die-casting industries while maintaining scrap aluminum recycling as our core business and extending our industrial chain. Our recycled aluminum alloy project in Wuhu has a designed capacity of 100,000 tonnes per year, with the first phase accounting for 50,000 tonnes. The project was officially launched and construction began in December last year, with production scheduled to commence in April this year. It will primarily produce recycled aluminum alloy liquid metal. The total planned investment is RMB 220 million, and we intend to further expand into die-casting production in the future.

Asian Metal: Thank you, Mr. Wang, for taking the time to speak with us. We wish your company continued success and hope it becomes a leading enterprise in the renewable resources recycling industry.

Mr. Wang: Thank you.