SHANGHAI, Aug. 9 (SMM) - Over two months have passed since the implementation of Decree No. 21, 2010 from the General Administration of Customs, which deals with the classification, shipping, and customs inspections of major solid waste materials. SMM conducted a survey to find the actual impact on traders of imported scrap copper now that the policies have been fully implemented. Generally speaking, SMM believes scrap copper imports have been only mildly affected by the new customs regulations, and that China’s scrap copper imports will remain stable in the short term and will not experience sharp declines.
In accordance with the new regulations, detailed declarations are made concerning shipping of imported scrap copper, with customs inspections to be conducted at designated ports. The implementation of the new regulations, to some extent, will increase trader costs of scrap copper imports. SMM believes the new policy will have a major impact on copper imports in the following three aspects.
First: China Customs has strengthened inspections of imported scrap copper since the new policy went into effect. Now, mixed or nude packing should be re-classified, increasing packing costs, while reducing misrepresentations and non-disclosures. These regulations are resulting in higher customs charges and lower importer profits, which is also cooling the enthusiasm of importers and is restricting scrap copper imports.
Second: The more stringent inspections are extending the time needed for declaration. The added time puts traders at a disadvantage as current copper prices are fluctuating over a wide range. Some scrap copper importers in Tianjin told SMM that the increased time is affecting business operations. One local trader said, “Customs declaration time has slowed down since May at Tianjin Port, and with average declaration period about 30 days or so”. The longer customs clearance period has increased costs for container storage, as well as customs declaration charges, and is having a significant impact on companies.
Third: Adjustments in price assessments by Customs generally lag behind spot market prices. The lack of timely market changes in Customs prices, especially when markets are experiencing significant movements, will affect profits for scrap copper importers.
SMM believes that the implement of the new customs regulations has increased costs of scrap copper imports and has narrowed profits. However, importers of scrap copper have now had time to make adequate adjustments. In addition, the market is also adapting to the waste material regulations.
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