EsThe market price of copper has climbed 11% since the start of June to hit a two year high. That’s partly the result of forthcoming plans by China to halt imports of machinery waste from next year, Bloomberg reports. The latter follows a similar push on plastic and paper waste which the Chinese government has already notified to the World Trade Organization according to Reuters.
Panjiva data shows that Chinese imports of scrap machinery have already begun to fall after a protracted expansion. Imports in the quarter to May 31 fell 8.5% on a year earlier, compared to a 17.5% annualized growth rate over the past three years. The largest importers are electronics firms including Hon Hai, likely reflecting regulatory recycling schemes overseas, particularly for batteries.
Source: Panjiva
The regulations are unlikely to cover pre-sorted copper scrap. By contrast to waste machinery imports of scrap have grown rapidly. In the 12 months to May 31 scrap copper imports were equivalent to 34.4% of “new” copper raw materials. Imports had increased 45.3% in the past quarter on a year earlier, compared to an 18.1% drop in copper cathode shipments. A prohibition on imports of presorted scrap would leave leading exporters including Ningbo Jintian Copper to compete for new materials and potentially facing higher costs as a result.
Source: Panjiva
Increased sales of copper cathode to China would provide a welcome respite to Chilean producers after exports fell 16.4% in the three months to May 31. Leading producers have not performed equally. Number one producer Codelco experienced a 23.4% downturn in exports globally, while Escondida (owned by BHP and Rio Tinto) dropped 77.5% after a strike that has now ended The Australian reports. Escondida’s travail’s have helped other miners including Spence (which jumped 73.3%) and Amalia (13.0% higher).
Source: Panjiva
