The long-anticipated new standards for high-grade copper scrap and aluminium scrap metal—due to come into force on July 1–has yet to be implemented at China’s customs, as the procedure for importing material under these standards has not been finalised, SMM learned from several traders, fabricators and smelters.

Prices of Chinese cobalt products may slow their downside trend in the short term as uncertainties around raw materials imports remain even as top supplier South Africa has eased coronavirus lockdown measures to level 4 which allowed freight transport to resume. 

Copper scrap supply in China is estimated to have shrunk nearly 200,000 mt in the first three months of 2020, as escalated virus-control measures disrupted global trade flows and as Chinese suppliers held back on sales following a slump in copper prices. A total of 225,083 mt of copper scrap was imported to China in January-to-March, down close to 140,000 mt, or more than 38% from the same period last year, according to data from China customs. SMM estimates that those copper scrap imports, with average Cu content of 78.49%, contained 176,676 mt of copper, down more than 37% from the quarter ended March 2019.

Prices of ternary materials and precursors in China will see further downside risk before May as inventories continued to pile up, driven by slowed or delayed purchases by downstream producers of power batteries amid falling orders. 

SMM surveyed 41 major aluminium processors in 12 provinces and found that their average operating rate dipped 0.6 percentage point on a weekly basis to 74.4% last week.

However, concerns about supply shortage sustain due to the disruptions to global copper scrap supply chain amid the coronavirus epidemic. Allowances in the first five batches this year amounted to 527,700 mt, which translate to 422,100 mt in Cu content based on an average grade of 80%.

The global widespread of COVID-19 has forced many countries to enforce stringent containment measures which result in a heavy impact on global economic activity. Over the past few months, we saw serious disruption of manpower, transportation and production in China. We are now seeing these scenarios happening around the world.

SHFE nonferrous metals closed mixed on Wednesday, as copper, aluminium, nickel and tin reversed a pullback at the open. Nickel jumped 1.9%, tin rose 0.6% and copper gained 0.4%, while aluminim dipped 0.1%, zinc fell 0.8% and lead dropped 1.2%.

The global widespread of COVID-19 has forced many countries to enforce stringent containment measures which result in a heavy impact on global economic activity. Over the past two months, we saw serious disruption of manpower, transportation and production in China. We are now seeing these scenarios happening around the world. 

Shanghai base metals, except for tin, opened higher on Friday morning, as oil prices skyrocketed overnight on hopes that Saudi Arabia and Russia could reach a deal.