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[SMM Analysis] the total amount of scrap copper issued in the third quarter continues to decrease compared with the previous quarter, and the supply of scrap copper is still limited.
Jul 7,2020 20:24CST
The content below was translated by Tencent automatically for reference.

SMM7, March 7:

The China solid waste Chemicals Management Network released the ninth batch of restricted list in 2020, which is the first batch of approval documents in the third quarter, of which the total approved import of copper scrap is 176746 tons, and the first batch is 222020 tons in the second quarter, down 20.39% from the previous quarter. The overall approval shows a quarterly downward trend, which is in line with the plan of the Ministry of Ecology and Environment to reduce the import of solid waste in the second half of the year.

The import of copper scrap decreased significantly in the second quarter due to the impact of the overseas epidemic. According to customs data, China imported a total of 361873 tons of scrap copper from January to May, and issued a total of 541754 tons in the first eight batches of approvals in the second quarter. Roughly speaking, the remaining volume of approvals in the first two quarters is about 179900 tons, which is sufficient. However, after the gradual relaxation of epidemic control in Southeast Asia, Europe and other regions, domestic enterprises began to import scrap copper and orders accelerated in late May, which is expected to be reflected in the scrap copper import data from June to August. By the end of June, in addition to the surplus approval documents of large enterprises, the approval documents of small and medium-sized processing enterprises had been basically consumed, and the overall situation was tense, while the recycled copper (brass) standard could not be used at this time, and enterprises were eagerly looking forward to a new round of approval documents.

The ninth batch of approval documents have just been issued, and although the number continues to decrease quarter-on-quarter, it can still be replenished by many small and medium-sized processing enterprises in the short term. There are also some views that a relatively sufficient volume of approval may reduce the pressure on the implementation of recycled copper (brass) standards as soon as possible, so as to allow more time to wait for the introduction of import rules related to recycled copper, and the actual implementation of recycled copper documents in the third quarter is expected to be further weakened.

According to SMM, the recent price advantage of scrap copper rod compared to refined copper rod is very huge, and the order is maintained well. The 100, 000-ton scrap copper rod factory wants to open more production lines to reduce the average cost, but it suffers from the shortage of scrap copper raw materials, and the demand for raw materials is doubled by opening one more production line (open hearth capacity of 150t / day). At present, the overall supply of scrap copper is still limited by imports and cannot support full production for a long time. At present, a new batch of approval documents have just been issued, the volume of scrap copper is relatively sufficient and the price advantage is obvious, the short-term import of scrap copper supply will undoubtedly increase. If the copper price is stable as a whole, it will continue to be conducive to the production of scrap copper rods and will further extrude refined copper rods for consumption.


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