SHANGHAI, Jul 11 (SMM) – SMM expects China's import quotas for Category Six copper scrap for the third quarter, on metal content basis, will generally offset the supply shortfall caused by the import ban on Category Seven materials, compared with the same period of 2018, as the grade of copper scrap imports climbs.
China's environment ministry on Wednesday July 10 granted 124,450 mt of quotas for imports high-grade scrap copper, or Category Six copper, which is being restricted from July 1. This was the second batch of approval after the restrictions.
In Cu content, the import quotas for Category Six materials in the first and second batches so far accounted for around 82% of the overall scrap imports in the third quarter last year, SMM calculated based on an average grade of 84.34% in May’s imports. The grade rose from 78.21% in April, and from a reading below 50% in May of 2018.
As quotas for more regions are expected in the months ahead, the supply gap in the third quarter could be bridged after Category Seven copper scrap was banned from moving into China from the start of the year.
The latest approval covered importers in areas of Tianjin, Zhejiang, Anhui, Jiangxi, and Guangdong, with Guangdong’s firms receiving 73.68% of the approved volume.
SMM learned that the quotas obtained by Chinese copper scrap importers so far accounted for some 30% of their total imports of Category Six materials in 2018. Most companies even received a greater approved volume than the actual imports in the third quarter of 2018.
Firms with fresh import quotas can bring in scrap copper before the end of this year.
A total of 364,879 mt, in physical content, of copper scrap imports were approved in the two batches, accounting for 90.7% of the imports of Category Six copper in the third quarter of 2018, and 56% of the overall copper scrap imports (Category Six and Seven) in July-September of 2018.