China to continue to release import quotas for scrap metal in H2 2020

Singapore — The Ministry of Ecology and Environment of China, or MEE, said in a press conference held on June 30 that China will continue to release the import quota allowance till the end of 2020 as scheduled to reduce imports of solid waste including scrap metal.

The new scrap metal standards, that is secondary brass, secondary copper and secondary cast aluminum alloys raw materials quality standard, released by China's State Administration for Market Regulation in mid-January will come into effect from July 2020. The new standards will not only apply to secondary raw materials imports but also apply to domestic secondary raw materials trading, MEE said.

However, the customs codes and import procedures should be obtained from the department responsible for the work.

China will thoroughly forbid imports of solid waste and MEE will no longer accept and approve the applications for solid waste imports from 2021, the ministry said.

This move has positive effect on the market, said an eastern China-based aluminum ADC12 producer. The government is prepping importers to import aluminum scrap meeting the new standards from July. The scrap under the new standard will be a cleaner version of current imported scrap.

The new scrap might go through a "cleaning" process in probably Southeast Asia/Vietnam before being imported into China, he added.

This means that scrap metal meeting new standards could no longer be subjected to quotas starting 2021.

The weekly domestic China ADC12 price was flat at Yuan 13,000-13,200/mt ($1,841-1,869/mt) ex-works China on June 30, according to S&P Global Platts assessment.

Sources continued to cite tight supply of domestic scrap, and producers remained limited by scrap import quotas.

"Some suppliers circumvent the quotas by just importing ADC12 from overseas," the ADC12 producer said. "When the price difference [between imported and domestic ADC12] is around Yuan 700/mt and above, customers will not mind using imported ADC12."

China's imports of aluminum scrap and copper scrap hit 57,269 mt and 69,456 mt in May, down 67.7% and 60.2% from a year earlier, respectively.