September Copper Scrap Imports Decrease Both YoY and MoM, Japan's Exports to China Show Significant Decline [SMM Analysis]

According to the latest data from the General Administration of Customs, China imported approximately 160,000 mt of copper scrap and shredded copper scrap in September 2024, down 5.74% MoM and 6.2% YoY (HS code 74040000).

Regarding supplier countries, the United States, Malaysia, and Japan continued to occupy the top three positions. The United States, as the largest supplier, exported about 32,000 mt of copper scrap to China in September, up 8.38% MoM but down 3.1% YoY. Malaysia, the second-largest supplier, exported about 17,000 mt of copper scrap to China in September, down 4.71% MoM. Japan, as the third-largest supplier, exported about 16,000 mt of copper scrap to China in September, down 6.9% YoY and showing a significant MoM decline of 19.7%.

According to a report by the Nikkei on June 3, 2024, the Japanese government plans to invest 30 billion yen over three years, in cooperation with Mitsubishi Materials Corporation and others, to build about 10 recycling facilities for used home appliances domestically. This aims to prevent the outflow of rare metals such as copper and strengthen economic security, which may have led to a recent decrease in copper scrap exports. With the establishment and operation of these recycling facilities, SMM expects Japan's copper scrap exports to continue to decline in Q4.

From the current market situation, SMM believes that the fluctuation in copper scrap imports in September is a normal phenomenon. According to traders, there is indeed a demand for factory construction in Tokyo and Osaka, Japan's economic centers, which has increased local copper usage and consequently reduced copper scrap exports to China.

Looking ahead, in terms of import profitability, although imports turned profitable in mid-October, import traders indicated that the short-term window opening would not fully boost purchasing sentiment. Additionally, some traders noted that overseas copper scrap has been relatively scarce in the past two to three months, especially in Europe. As the "September-October peak season" gradually comes to an end, demand for copper is expected to decline. Therefore, SMM expects that October copper scrap imports may slightly decrease MoM but are unlikely to show significant volatility.