After an extended consultation period, Fastmarkets has decided to amend its discount assessment for No2 copper scrap imported into China so that it is aligned with the country's new import policy for such material.
Following
new policy implemented in China on January 1, 2021, all copper scrap must now meet certain criteria to be reclassified as "recyclable copper material" before it is allowed to enter the country.
This also put an end to the import quota system for foreign waste, in place since mid-2019, that allowed copper scrap to be brought into China.
Currently, Fastmarkets makes a monthly assessment of the No 2 birch/cliff scrap discount to the outright London Metal Exchange/Comex copper price on a cif China basis.
In June 2020,
Fastmarkets launched a consultation on the possible discontinuation of the above assessment and the launch of a new monthly copper material discount assessment. The
consultation period was extended in August after the release of details surrounding China's new import policy was delayed; details of the new policy only emerged in late October, instead of July as originally scheduled.
But while market participants noted certain differences between copper scrap and recyclable copper material under China's new impurities requirements, including the amount of paint-coated birch/cliff allowed in a cargo, they said the driving factors of the discount for the product are largely unchanged.
Meanwhile, in terms of chemical specification, including copper content, the vast majority of copper scrap that was imported into China in the past
would have been eligible for reclassification as copper recyclable material.
For these reasons Fastmarkets has decided not to launch a new assessment, but will rather amend the existing assessment's name and specifications to reflect the changes in China's import policy.
The changes will come into effect on Monday January 25, 2021.
The detailed specifications for this assessment are listed below with amendments in italics:
MB-CU-0360: 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. Coated material should consist no more than 5% of the total mass of No 2 copper material. Particles of non-metallic contamination in the form of dust, sludge, crystalline salts, metal oxides and fiber 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: Min 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
For more information, or to provide feedback on this notice, or if you would like to provide price information by becoming a data submitter to this price, please contact Julian Luk by email at:
pricing@fastmarkets.com. Please add the subject heading FAO: Julian Luk, re: copper scrap cif China.
To see all Fastmarkets' pricing methodology and specification documents, go to
https://www.fastmarkets.com/about-us/methodology.