China Tightens Inspection of Scrap Copper Imports, CBI Says

SHANGHAI, July 6 -- China's Guangdong province has tightened inspection of scrap copper imports in a bid to crack down on underreporting of the metal content and underpaying of tax, commodities researcher CBI China Co. said.

    The clampdown, started in mid-May in Guangdong which is a major scrap trading centre, has raised the effective value-added tax at ports there, Qu Yi, a CBI analyst, said in an e-mailed report. Scrap clearance at other major ports such as Ningbo and Tianjin has been normal, Qu said.

    "Sizeable refined imports may be sustained for longer than expected as Guangdong's clampdown helps keep scrap shipments at a low level," she said by phone from Beijing today.

    Refined imports from China, the world's largest consumer of copper, jumped to record this year partly because the global recession cut scrap supplies. Scrap copper, recycled into the metal, accounts for a third of China's refined copper production, according to China's Nonferrous Metal Industry Association.

    China increased import duties on copper scrap in the middle of May, curbing transactions, the Bureau of International Recycling said last week.

    CBI's Qu disputed speculation that China had raised the tax on scrap metal imports in her report, saying "our understanding is there has been no increase in statutory tax rate." A 17 percent VAT is charged on the metal content of the scrap.

    (Source: Bloomberg)