The potential Chinese ban on scrap metal, scrap wire, scrap motor imports by the end of 2018 is expected to hit 330,000 mt/year of copper scrap imports, according to a survey of various copper scrap importers and scrap metal dismantling sources, Jiangxi Copper Corp said in a report in its website Tuesday.
The recycling branch of China Nonferrous Metals Industry Association was notified of the ban on scrap metal, scrap wires and scrap motor by the end of 2018 last Tuesday.
The news caused Shanghai Futures Exchange's most active September 1709 copper futures to break above Yuan 50,000/mt to close at Yuan 50,050/mt ($7,508/mt) last Wednesday, up Yuan 1,810 on the day.
SHFE futures were still above Yuan 50,000/mt on Wednesday, closing at Yuan 50,180/mt, down Yuan 160 from Tuesday, SHFE data showed. Back in early July, prices at Yuan 47,500/mt, according to SHFE.
Jiangxi Copper forecast China's national copper scrap imports would not fall sharply in the second half of this year because of economic factors.
The producer said that due to the policy announcement the price gap between refined copper and imported copper scrap would narrow in the coming days, boosting imported copper scrap traders' profits, and, in turn, imports.
Jiangxi Copper said in the long run, the ban on scrap metal, scrap wire and scrap motor imports could spur some dismantling capacity in China to be relocated to Southeast Asian nations, adding that when mainland Chinese dismantling capacity is renewed, China's copper scrap imports are expected to rebound.
China's national copper scrap imports in January-May hit 1.51 million mt, up 18% year on year, data from the General Administration of Customs showed. The H1 data was unavailable.
Despite China's copper scrap imports in January-May from the US having fallen 7% year on year, to 204,108 mt, copper scrap imports from Hong Kong and Australia rose 6% and 13% year on year, to 274,042 mt and 197,096 mt, respectively.
Back on July 18, the Ministry of Environmental Protection submitted documents to the World Trade Organization, seeking a ban on 24 types of solid waste.
The ministry said it found a vast amount of highly polluting and dangerous waste, mixed in solid trash that can be recycled, causing severe pollution in China, data from Tianjin-based Ziya Circular Economy Area website showed.
Back in April, environmental protection inspectors began being posted to the provinces of Hunan, Anhui, Sichuan, Shanxi, Shandong, Liaoning, Jilin, Zhejiang, Fujian and Hainan, the autonomous regions in Xinjiang and Tibet, as well as the cities of Shanghai and Tianjin, data from state-run metals agency Beijng Antaike showed.
The agency said due to increasingly stringent environmental protection measures in China, medium and small domestic copper producers and downstream copper processing companies would find it difficult to survive.
It said the domestic copper rod sector has been hit hard by government restrictions on copper scrap supply.
