China Solid Waste and Chemicals Management, the state conduit regulating the import of waste materials, issued a slightly larger import quota for nonferrous metal scrap in its latest allocation announced on August 18, but awarded no quota at all for steel scrap.
In the bulletin issued by China Waste Management on Wednesday, 13 domestic enterprises were awarded the rights to import a total of 14,530 tonnes of copper scrap, higher than the previous quota – the tenth this year and announced on July 24 – of 10,110 tonnes. Similarly, three companies were permitted to import 2,610 tonnes of aluminium scrap, higher than the tenth quota volume of 1,110 tonnes, Mysteel Global notes. All the scrap must be imported and clear Customs before December 31 this year, the bulletin said.
On the other hand, unlike in the previous allocation where seven scrap processors and recyclers were allowed to share an admittedly small allocation for steel scrap of 3,970 tonnes, this time China Waste Management awarded no quota for such scrap.
But a Shanghai-based market watcher commented was not surprised that the scrap import regulator had skipped steel this month, pointing out that the issue of Beijing’s designation of steel and metal scrap as ‘foreign garbage’ remains unresolved, and until it is, scrap quotas will fluctuate. In any case, even when a quota was issued last month, the volume permitted was so small it could not ease the shortage of steel scrap supply and satisfy market demand, she observed.
A scrap recycling and processing company based in East China’s Zhejiang province, which had previously secured a steel scrap import allocation, didn’t even bother applying to the government for this round of quotas.
“The application and approval processes are laborious, and (even) if we succeeded in getting the quota, the volume we’re permitted would be very small,” an official with the company explained. “As a result, we quit the quota business this time,” he told Mysteel Global.
As of August 19, Mysteel’s steel scrap price index had nudged up by Yuan 9/tonne ($1.3/t) on month to Yuan 2,557.4/t on delivery and including the 13% VAT – equivalent to $365/t, while the price for imported HMS 1&2 (80:20) in Turkey, for example, had increased by $27/t on week to $283/t CFR, Mysteel’s data shows.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint Research
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