Page 40 from: June / July 2013

40 June/July 2013

m a r k e t a n a l y s i s

Non-Ferrous

Chinese controls dampen imports
Margins have remained squeezed over recent weeks for
the non-ferrous scrap sector. As per June 12, LME
cash prices are at the following per-tonne levels (the
corresponding figures from our previous non-ferrous
metals report of early May are given in brackets):
aluminium US$ 1848.50 (US$ 1846.50); copper
US$ 7036 (US$ 7079); lead US$ 2129 (US$
2021); zinc US$ 1833 (US$ 1862); and tin US$
20 600 (US$ 20 775).

Closed: June 12 2013

Aluminium
As discussed at the late-May BIR Con-
vention in Shanghai, the government of
India has confirmed an increase in basic
customs duty from 0% to 2.5% on alu-
minium scrap imports and a re-imposi-
tion of 4% special additional duty of
customs (SAD) on brass scrap. The Metal
Recycling Association of India has
expressed its disappointment and told
government officials that the measures
will hinder the use of metal scrap.
In the most recent BIR Non-Ferrous
Metals World Mirror, it has been sug-
gested that the mood in the city of
Jamnagar, which has the largest pro-
duction of brass rods and components
in India, has been ‘very grim’ as pay-

ment of the SAD comes on top of the
‘serious challenge’ already posed by
cheaper imports of brass rods under
free trade agreements.
Meanwhile, and in addition to causing
clearance delays and extra costs, China’s
‘Green Fence’ inspection initiative has
prompted some sellers to divert their
cargoes to other ports where the enforce-
ment regime is perceived to be less strin-
gent. Overall, China’s aluminium scrap
purchases declined in April by around
14% to 177 923 tonnes; as a result, total
imports in the first four months of 2013
were 4% lower than in the correspond-
ing period last year at 747 753 tonnes.
Based on information from China’s
Customs Office, January-April imports

of primary aluminium plummeted
almost 74% to 59 249 tonnes com-
pared with the same period in 2012.
The light metal’s relatively low price on
the domestic market has dampened
enthusiasm for overseas purchases
since the beginning of this year. How-
ever, there is a belief that this will lead
to a shortage over the coming months
and, as a consequence, to an increase
in inbound shipments.
According to China’s Nonferrous Met-
als Industry Association, the country’s
output of primary aluminium climbed
1.5% to 1.7 million tonnes in April
while the total for the first four months
was more than 10% higher year on
year at around 7 million tonnes.
On the Shanghai spot market, the alu-
minium price charted an upward
course in May from Yuan 14 280 per
tonne (US$ 2329) to Yuan 14 700
(US$ 2398). With most aluminium mills
running at a loss, a substantial amount
of capacity has been shut down since
the beginning of this year. However,
light metal consumption forecasts
remain optimistic for China’s automo-
tive, household appliance and real
estate sectors owing to the country’s
ongoing urbanisation plans.
Although industry conditions have
been generally difficult in many parts
of Europe this year, Germany has con-

tinued to perform reasonably well and
aluminium scrap is in short supply.
Domestic aluminium wire scrap (Achse)
prices were recently around US$ 1875
per tonne, while aluminium turnings
(Autor) were yielding some US$ 1422.
Prices have fallen in the UK, with com-
mercial pure cuttings at US$ 1565-
1641 per tonne and commercial turn-
ings at US$ 1139-1215.  
In volume terms, US aluminium scrap
exports tumbled 15% in the first four
months of 2013 when compared to the
same period last year, according to the
Census Bureau. Meanwhile, US service
centres shipped around 127 500 tons
of aluminium products in April for a
year-on-year decline of 1.2%, taking
the total for the first four months of the
year to 484 800 tons – more than 8%
shy of the 528 100 tons of January-
April 2012, according to figures from
the US Metals Service Center Institute
(MSCI). In the same four months, ship-
ments by Canadian service centres fell
5% to 52 500 tons, it also notes.

Copper
European copper giant Aurubis
believes red metal prices have reached
the bottom, with a substantial scrap
shortage leading to the payment of
high premiums at present. This dearth
of supply is quite surprising as gener-

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