Copper scrap imports rebounded ahead of new import restrictions in September

SHANGHAI, Sep 3 (SMM) — China imported 75,113 mt of copper scrap in July, an increase of 9.26% from June but a decline of 41.1% from a year earlier. Year-to-date imports through July stood at 505,731 mt, down 47% on the year.

According to the latest edition of the SMM Copper Raw Materials Market Report, imports of copper scrap are likely to extend gains in August as domestic users and shipping companies required seaborne copper scrap to arrive before September to avoid strict penalties resulting from the new solid waste law which is effective from September 1 2020.

However, the new solid waste law is likely to result in a decline in copper scrap imports in September. Small and medium scale companies have utilised large volumes of import approvals. Foreign shipping companies fully comply with the new solid waste law, objecting solid waste imports based on approved quotas. This depressed copper scrap imports in September, lowering quotes.

China imported 45,228 mt of copper ingot in July, up 23% on the month. Year-to-date imports through July totalled 240,066 mt, up 120.26% year on year. Higher copper ingot imports have made up for shortages of imported copper scrap. This, together with domestic scrap supply recovery, minimised the impact on scrap users.

In addition, China is expected to confirm on the secondary copper resource import policy by the end of 2020 when Category Six copper scrap imports are banned from entering the country.

Demand for copper scrap is strong as the current price spread between copper cathode and copper scrap exceeded 2,000 yuan/mt. Secondary copper can be imported without restrictions, and secondary copper standards and requirements remain as the market focus for this quarter.