China issues second batch of scrap metal import quotas

The Chinese government today issued a second batch of scrap metal import quotas totalling just under 450,000t for delivery in the third quarter.

The import quotas issued by China Solid Waste and Chemicals Management (a division of the Chinese environmental ministry) approved a total of 436,930t of copper, aluminium, and ferrous scrap for delivery in ports in south, southeast, and north China. Most of the quotas were awarded to firms based in Guangdong, Xiamen, Shanghai, Ningbo, and Taicang, while a smaller volume is for delivery in Tianjin and Dalian.

Aluminium scrap (under harmonised tariff code 7602000090) accounted for 70pc of the total quota issued at 306,930t, while copper scrap (tariff code 7404000090) totalled 124,450t and ferrous 5,550t.

Under the new policy, all scrap metal importers in China will need import licences issued under approved quarterly quotas from 1 July onwards before they can receive any material.

The first quota batch, issued on 20 June, approved 240,429t of copper, 54,256t of aluminium, and 14,968t of ferrous scrap for import in the third quarter.

The total third-quarter scrap quota issued to date comprises 364,879t of copper, 361,186t of aluminium, and 20,518t of ferrous.

The copper quota is below volumes of copper scrap imported in the third quarter of 2018. By contrast, the aluminium quota has already exceeded the deliveries in the same quarter last year. China imported 624,276t of copper scrap and 349,510t of aluminium scrap in the third quarter of 2018, according to official customs data.

A Chinese scrap importer said it was widely expected that import volumes will be strictly regulated and many have prepared by stocking up ahead of 1 July. Many plants are also running at a lower capacity, which has buffered the effect of the scrap import restriction.

Market participants expect further quota rounds to be announced in the coming months for other regions in China.

China imported 5.32mn t of scrap last year. Copper accounted for 45pc, or 2.41mn t, aluminium 1.57mn t, and ferrous scrap 1.34mn t.