[SMM analysis] the number of scrap copper approvals published in the fourth quarter was only 17% of that in the third quarter.

SMM, 18 October:

On October 17, 2019, the solid waste Center announced the 13th batch of solid waste import approval documents for 2019, involving a total of 57365 physical tons of waste copper, according to 80% grade calculation, about 45892 tons of metal; involving 71 enterprises, mainly distributed in Zhejiang, Guangdong, Anhui, Tianjin and other areas, including Ningbo Jintian, Zhejiang Judong, Ningbo World Trade Organization, Tianjin Xineng and other major waste copper import enterprises.

The amount of scrap copper in the first four batches of approval in 2019 was 240429 tons, 124450 tons, 87680 tons and 31658 tons, respectively. Up to now, the total physical amount of the first five batches of approval documents is 541582 tons, about 433266 tons of metal.

The 13th batch of scrap copper approval documents announced this time is the fifth batch of approval documents announced after the implementation of the waste copper import policy on July 1. The approved enterprises are involved in the first four batches of approval documents, and are mainly large domestic scrap copper import enterprises. From this, it is inferred that the announcement approval is the first batch of approval documents in the fourth quarter. The approved enterprises are mainly the enterprises with large batches of approval documents in the first three batches. Due to the late publication of the fourth batch of approval documents, the utilization rate of enterprise approval documents is relatively low, so there is no reply to the approval documents in the new quarter. It is also because enterprises have received approval documents for different times, resulting in a significant reduction in waste copper imports in July compared with the previous month.

From the point of view of the number of approval documents, the number of approved enterprises in the fourth quarter is significantly lower than that in the third quarter. From the perspective of the amount of approval of major enterprises, the average amount of approval in the fourth quarter is only about 17% of that in the third quarter, and the number of approval documents in the fourth quarter is seriously insufficient. It is expected that the impact of the reduction in scrap copper imports in the fourth quarter on enterprise production will gradually appear.

In the second half of 2018, China imported 723000 tons of scrap copper from overseas. At present, the first five batches of scrap copper approval documents have approved a total of 433000 tons of scrap copper and metal, which is only about 60 percent of the import volume in the second half of last year. According to the approval situation in the third quarter, the number of subsequent approvals in the fourth quarter is expected to continue to decline. It is estimated that the total approval volume in the second half of this year accounted for about 70% of the import volume in the second half of last year, and about 200000 tons of metal was reduced in the second half of the year.

In the first half of 2019, China imported 732000 tons of scrap copper, an increase of 17 percent over the same period last year, or about 106000 tons of metal. Since the implementation of the scrap copper approval policy in July, waste copper imports have dropped from about 180000 tons per month to about 130000 tons per month, a month-on-month reduction of nearly 1 / 3, and also began to decline from the same period last year. It is expected that subsequent imports will continue to shrink, and waste copper imports in the fourth quarter are not optimistic.

So far, from January to August 2019, China has imported a total of 931000 tons of scrap copper, an increase of 9.8 percent over the same period last year, and there is still an increase of about 83000 tons from the same period last year.

(SMM Wei Xue)