SHANGHAI, Jun 14 (SMM) – Copper scrap will determine the direction of the copper market, amid slow consumption growth and a smelting capacity spike, said Ye Jianhua, senior copper analyst from SMM on Friday June 14.
Certain waste materials would be categorised as renewable resources that are allowed to be imported to China, after foreign trash is fully banned by the end of 2020, and the details are expected to be announced in the fourth quarter of 2019.
If brass scrap imports are banned, the Chinese market would see a supply deficit of 300,000-400,000 mt in Cu content, Ye told delegates at the Nonferrous and Ferrous Metals Summit jointly held by SMM and Chinese financial research firm Horizon Insights in Shanghai on Friday June 14.
Copper smelting capacity spiked in China in recent two years, which tightened global mine supplies and weighed on treatment charges to five-year lows.
SMM estimates that 800,000 mt of copper smelting capacity will come online in the remainder of the year.
China’s copper cathode production is expected to soar after June, given the timeline of new capacity commissioning.
Copper consumption in China, meanwhile, entered a period of slow growth. SMM expects a compound annual growth rate of 2.7% for 2019-2021.