SHANGHAI, Jul 23 (SMM) – Higher copper content in China's copper scrap imports prevented a domestic shortage in the first half of the year while restrictions, ban cut imports in physical volumes, SMM assessed based on data from China Customs released on Tuesday July 23.
SMM estimated that imports of copper scrap in June grew 40,000-50,000 mt in copper content form a year ago, while imports slid 15.8% year on year in physical volumes, standing at 170,000 mt in June.
This means domestic copper scrap imports, in Cu content, in the first half of the year could stand more than 100,000 mt higher than the same period of 2018.
The ban on imports of Category Seven materials that began from the start of this year and the rush to import higher-grade Category Six materials before restrictions kick in from July accounted for the divergence in import volumes in terms of physical tonnes and Cu content.
For the third quarter, SMM expects China's import quotas for Category Six copper scrap, 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 of Category Six copper. 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.