China scrap imports facing multiple pressures

Copper scrap imports to China dropped by 5% year-on-year in April to 319, 629 tonnes, according to Chinese customs data.

Copper scrap imports to China dropped by 5% year-on-year in April to 319, 629 tonnes, according to Chinese customs data.

Overall scrap imports from January- April reached 1,192,721 tonnes, a drop of 12.68% from the same month last year, which is mainly attributed to tight market supply, higher prices, and tough customs procedures.

“Copper scrap prices remained high. By adding the high import tax, we’re losing money to use scrap as raw material,” a smelter source told Metal Bulletin. “Meanwhile, both LME and SHFE copper prices plummeted in March, we have increase ratio of refined copper/blister usage.”

“Moreover, supply of copper scrap became tighter as many developed country imposed more strict restrictions on scrap export due to enviromental considerations,” the source added.

“China also put more regulations in place for imported scrap after last year’s ‘green fence’ policy; now it takes more time for customs clearance and the procedure is more complicated,” he added.

“We have heard one of China’s largest smelter switched one of their production lines in Guangdong province which previously using copper scrap to blister,” the source said.

Another Guangxi based recycling company also stated they have raised purchases of blister, and cut down scrap imports.

From Chinese customs’ data, blister imports from January-April reached 223,430 tonnes, an increase of 20.85% on the previous year.

The USA is still the largest exporter of copper scrap to China, and accounts for more than 20% of the total imports.

“It’s estimated that China will add new smelting and refinery production capacity of about 900,000 tpy and 950,000 typ separately in 2014, to reach a total capacity of 5.79 million and 9.91 million tonnes,” a commodities analyst who has direct knowledge of China’s copper scrap market told Metal Bulletin.

“An enlarged gap between China’s smelting and refinery capacity created demand for copper scrap, but if copper scrap prices remain high while domestic copper prices remain low, smelters will seek copper blister as substitute,” the analyst said

editorial@metalbulletinasia.com

What to read next
The most recent financial results published by base metals mining companies highlight just how inflation is affecting profit margins, with increasing wages, financing costs and input prices all hitting profits, sources told Fastmarkets in the week to Thursday March 28
Century Aluminum is among those selected to start award negotiations for up to $500 million in Bipartisan Infrastructure Law and Inflation Reduction Act funding to build a new aluminium smelter, the company said on Monday March 25
Participants in the copper concentrates market are struggling to comprehend an “unstoppable” decline in treatment and refinement charges (TC/RCs), with every week bringing spot deals at fresh lows and rumors each “crazier” than the last, sources have told Fastmarkets
The US Department of Energy selected five base metals projects to receive more than $900 million in federal investment from its Industrial Demonstration Program (IDP), leading to a reduction of four million tonnes of carbon dioxide emissions annually, according to a statement by the Department on Monday March 25
Aluminium producer and recycler Constellium announced on Tuesday March 12 that the company is moving to test hydrogen utilization at an industrial scale as a power source in its casthouses
Fastmarkets has corrected its MB-ALU-0002 alumina index, fob Australia and its MB-ALU-0010 alumina inferred index, fob Brazil, which were published incorrectly on Monday March 18.