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China changes tack

Regulations for importing non-ferrous scrap into China are said to have eased but traders are waiting to see if the changes make any real difference.

An easing of the regulations for the imports of copper and aluminium scrap into China came into effect in November – but industry sources were unsure the changes would make much difference. On 23 October, the country’s Ministry of Ecology and Environment clarified that updated regulations initially announced in July would officially apply from 15 November, just as Recycling International was going to press.

The update indicated the categories would be limited to copper wire, mixed copper materials and copper nodules to make importing less complicated. ‘Brass recycled raw materials’ would be called ‘copper alloy materials’ with copper-nickel and high-copper material added to the group.

Wrought aluminium and recycled high-purity aluminium become permitted imports. Even so, No1 and No2 copper scrap will still have to contain at least 97% copper content, while the purity level for copper nodules is set at 98%. Aluminium scrap and alloys must have at least 91% aluminium.

Fastmarkets reported that market sources werenot convinced more material would be imported into the country in the short term.While Chinese smelters are hungry for scrap material, the impact on copper scrap imports is expected to be limited even after the floodgates open since China’s quality requirements are unchanged,’ was Fastmarkets’ comment based on conversations with sources, adding that aluminium recyclers were more optimistic as they were seeing growing demand for their scrap material.

ALU & CU becalmed

Meanwhile, the situation in the European metal markets remains tense with no change in the situation in sight. The poor state of the metal industry continues to have an impact on metal recyclers. Metal producers and the metal processing industry in Europe have been suffering from the poor economic situation for months.

Wars in Europe and the Middle East have increased pressure, as has uncertainty about US or EU tariffs on Chinese products and possible countermeasures from China.

Production and sales at aluminium plants are reportedly still declining. Plants that specialise in the production of aluminium products for the automotive industry – especially e-mobility – are complaining of significant sales problems. E-cars from Europe are selling much less than expected. In many cases, they have had to switch from three-shift to two-shift operations. Short-time work is once again an issue for many.

The construction industry continues to be a reliable buyer of aluminium but is lacking major projects and many municipalities and private investors have postponed projects.

The outlook is little better for copper in Europe amid weak trading. Buyers are acting cautiously and only ordering for short-term needs. Many processors are a long way from building up stocks. Scrap volume is low and exports to areas outside Europe are lower than most market participants had hoped.

Shorter LME contracts

The key industries in the European copper market are the metal and electrical industries, and mechanical engineering. The latest figures speak for themselves: in Germany alone, around 50 000 jobs have been cut in these sectors since September 2023.

The productivity of some companies is now comparable to that of the early 1990s. Despite the poor physical market, copper scrap prices in Europe remained at a high level, largely based on the fixed LME prices.

LME says it is responding to calls for smaller contracts, perhaps down to one tonne instead of the current 25-tonne minimum, to support a wider range of traders.

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