SHANGHAI, Jan 19 (SMM) – China has issued detailed standards on copper and aluminium scrap that can be classified as recyclable materials and will no longer face import restrictions from July.
The introduction of these standards, which are largely in line with market expectations, reassured Chinese scrap users who had been greatly concerned about scrap supply this year, as more than 90% of current copper scrap imports could qualify the Cu content threshold.
Under the standards, copper scrap with Cu content of 94-99.9% and brass scrap with Cu content of 56-75% could be deemed as recyclable copper and brass raw materials, instead of the so-called “solid waste.”
However, uncertainty lingers around the implementation of the standards as there are also limits on other aspects such as content of impurities and moisture and appearance, which raises the question—how strictly Chinese customs will enforce these standards?
Copper scrap imports are now restricted to a quota scheme, which will be ruled out after Beijing completely bans imports of solid waste by the end of this year. Quotas issued so far appear to be ample to satisfy demand in the first quarter, while the implementation of recyclable copper, brass and aluminium raw materials from July 1 could ensure scrap supply in the second half of the year. This leaves scrap supply in the second quarter in uncertainty.
China began its copper scrap clampdown by moving Category 7 material to the list of restricted imports in December 2017 ahead of a complete ban at the end of 2018. The import restrictions on Category 6 materials, which have higher quality, came into force in July 2019, and quotas shrank sharply in the fourth quarter.
This prompted Chinese secondary refineries to switch to alternative feeds such as remelt ingot, leading to a redrawing of the global copper scrap industry. With the copper scrap industry moving from China to regions such as Southeast Asia and Middle East, low-quality copper scrap would be processed into materials with higher quality or remelted into ingots before entering China.