Under a new categorization policy being introduced in China, most No2 scrap could be traded as renewable copper materials starting from July 2020.
Background to the consultation
At present, China’s copper scrap imports are subject to various constraints. The first is quotas; the second is a 30% tariff on United States-origin copper scrap; and the third is sellers’ access to scrap cargo inspection services conducted by the China Certification & Inspection Group (CCIC).
It remains unclear whether these price-moving constraints will still be in place after July because, for the first time, birch/cliff material could be imported into the country as merchandise rather than as scrap.
Fastmarkets has learned that the most imported birch/cliff will be eligible to be reclassified
as ‘RCu-2B’ under the category of ‘copper processing materials.’
Recyclable copper products may be granted customs HS codes different to those for copper scrap, potentially giving rise to a need for a tracker price for RCu-2B.
The consultation comprises two parts:
1. Proposed launch of No2 copper material, RCu-2B (birch/cliff) discount
Name: No2 copper material, RCu-2B (birch/cliff), cif China, LME/Comex discount, US cents per lb
Quality: Minimum copper content 99% with a minimum recovery rate of 94%. Clean copper tube, belt, plate, rod, wire and other shapes. Includes burned copper wires of 1.6mm and above, attachments and surface plating. Particles of non-metallic contamination in the form of dust, sludge, crystalline salts, metal oxides and fibre should not exceed 2mm in diameter, and these particles should not exceed 0.1% of the total content, as defined by China’s State Administration for Market Regulation.
Quantity: Minimum lot size of 25 tonnes
Location: cif Chinese ports (mainly Shanghai, Guangdong, Zhejiang, Tianjin and Shandong)
Timing: Within 5 weeks
Unit: US cents per lb
Payment terms: Cash against documents, letter of credit, telegraphic transfer; other terms normalized
Publication: Monthly, last Monday of the month, 3-4pm London time