BEIJING- China’s market regulator published new standards for high-grade copper scrap and aluminum scrap metal on Sunday, shedding some light on what material will be allowed into the country from the second half of this year.
Details of the new standards, which take effect on July 1, have been highly anticipated by metals traders eager to know if they will still be able to ship their scrap into China, the world’s biggest metals consumer, as it bolsters its environmental crackdown on imports of solid waste.
Beijing has set a target of reducing solid waste imports to zero by the end of 2020 but scrap metal meeting the new standards, published by the State Administration for Market Regulation, will be classed as a resource rather than waste.
The new standards set minimum copper contents ranging from 99.9 percent for types of scrap including bare bright copper wire, commonly known as “barley” under Institute of Scrap Recycling Industries (ISRI) specifications, down to 94 percent for No. 3 copper scrap nodules.
“All the other ISRI grades … with much lower copper contents and foreign elements (are) also permitted for import based on the full table they’ve established,” said Michael Lion, president of Lion Consulting Asia and a China scrap metals veteran. “So copper refineries that refine these grades get their feedstock.”
In the case of aluminum scrap materials, the minimum aluminum and aluminum alloy content was set at 100 percent for recycled aluminum ingots, 98 percent for aluminum castings and 91 percent for aluminum blocks.
Reacting to the new standards, a China-based scrap copper importer and an industry official both described them as “very strict,” although a scrap aluminum importer said they were not as severe as feared and it remained to be seen how strongly China’s customs would enforce them.
Meanwhile, London copper prices rose on Monday, as better-than-expected data from top consumer China boosted sentiment, but trading volume was low ahead of a long holiday in China.
Three-month copper on the London Metal Exchange (LME) rose 0.1 percent to $6,280.50 a ton, hovering around an eight-month high as investors were upbeat about some of China’s key economic data released on Friday.
China’s industrial output and retail sales in December as well as 2019 fixed-asset investment rose better than expected.
“Downstream retail sectors and manufacturing sectors should be the key drivers for China’s 2020 economic growth. With solid demand for homes, China’s investment in property sectors and related manufacturing sectors may also support asset investment growth,” analyst Helen Lau of Argonaut Securities said.
“Against this development, overall demand for commodities is set to improve,” she said in a note.
Shanghai Futures Exchange’s (ShFE) most active copper contract, however, eased 0.6 percent to 49,040 yuan ($7,163.31) a ton after growing 0.8 percent last week, as trade slowed leading up to China’s week-long Lunar New Year holiday starting Jan. 24. — Reuters
