Page 76 from: Recycling International November/December issue 2024
MARKET ANALYSIS
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.
Singapore Convention in October
(see BOX). ‘One lot on the LME for
copper is a quarter of a million dol-
lars,’ Vu explained. ‘We will look
down towards a one-tonne contract
and to support the industry as well.’
He did not commit to a time frame
but said: ‘The first step is to grow
liquidity in the monthly contract that
would then allow us to build into the
small-sized contracts.’
Vu was speaking to delegates more
generally about ‘probably the most
impactful change’ carried out in 150
years. In September, LME published a
white paper on enhancing liquidity
which goes out to consultation shortly
for implementation by the end of
2025. There would be greater trans-
parency and more support for the
physical market, he promised.
‘Essentially, enhancing liquidity makes
buying and selling much smoother and
benefiting everyone in the market.’
76
contain at least 97% copper content,
while the purity level for copper nod-
ules is set at 98%. Aluminium scrap
and alloys must have at least 91% alu-
minium.
Fastmarkets reported that market
sources were not 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’ com-
ment based on conversations with
sources, adding that aluminium recy-
clers 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 coun-
termeasures from China.
Production and sales at aluminium
plants are reportedly still declining.
Plants that specialise in the produc-
tion of aluminium products for the
automotive industry – especially
e-mobility – are complaining of signifi-
cant 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 order-
ing for short-term needs. Many pro-
cessors 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. 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.
SMALLER LME CONTRACTS
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. The
announcement came from Joe Vu,
senior vp, head of financial sales,
Asia, during a session at BIR’s
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 com-
plicated. ‘Brass recycled raw materi-
als’ would be called ‘copper alloy
materials’ with copper-nickel and
high-copper material added to the
group. Wrought aluminium and recy-
cled high-purity aluminium become
permitted imports. Even so, No1 and
No2 copper scrap will still have to
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