Norddeutsche Affinerie AG, Europe's largest copper smelter, and other producers of the metal are seeking restrictions on the region's scrap exports to China, saying buyers in the world's fastest-growing economy are draining supplies and driving up costs.
Eurometaux, which represents Europe's metals industry, met with the European Commission and expects a decision within weeks, said Monique Jones, the group's director of trade. Prices for used copper wire have surged 79 percent in the past year to $2,625 a metric ton, according to Metal Bulletin.
Export limits ``should be quickly considered as a temporary and exceptional measure to make sure we have access to that scrap under fair conditions,'' Jones said in a telephone interview from Brussels. Copper users in the U.S. made a similar request to that nation's Commerce Department this month.
Recycled metal accounted for 9.9 percent of the 15.2 million tons of copper produced last year, the International Copper Study Group estimates. China imported 3.2 million tons of scrap copper salvaged from computers, radios, wiring and other sources. One- fourth of it came from the EU.
The scrap helped feed Chinese demand for refined copper, used in construction and manufacturing, that surged 20 percent last year to 3 million tons. The economy expanded 9.7 percent in the first quarter as the government failed to curb investment that has led to shortages of raw materials.
Europe's other copper smelters are Umicore SA, the world's largest recycler of precious metals, closely held Metallo-Chiique International NV of Belgium, and Spain's Atlantic Copper SA. Atlantic Copper is a unit of Freeport-McMoRan Copper & Gold Inc., based in New Orleans.
Michaela Hessling, a spokeswoman at Hamburg-based Norddeutsche, and Tim Weeks, a spokesman for Umicore in Brussels, referred questions to Eurometaux.
China Rebate
Chinese recyclers can pay more for scrap because of a rebate they get from their government on exports of refined-copper products, Eurometaux said. The rebate is usually higher than the 17 percent tax that the companies pay when importing scrap, the group says.
``There is no decision on our side,'' Arancha Gonzalez, a European Commission spokeswoman, said by telephone from Brussels. ``We are continuing to discuss this issue with the industry.''
Norddeutsche produced 530,000 tons of refined copper last year, 40 percent from scrap. Chief Executive Werner Marnette blamed ``the ruinous purchasing of copper scrap by Chinese competitors'' for an 81 percent plunge in net income in the year ended Sept. 30, to 4 million euros ($4.9 million).
The company's shares have gained 11 percent in the past year, lagging a 52 percent surge in the Bloomberg Europe Metal Fabricate/Hardware Index. Norddeutsche is one of the index's 16 members.
Smelters are becoming more reliant on scrap because of a shortage of copper ore, worsened by disruptions at the world's two biggest mines, BHP Billiton's Escondida in Chile and Freeport- McMoRan's Grasberg in Indonesia. Global output will fall 850,000 tons short of demand this year, forecast Stephen Briggs, an analyst at Societe Generale in London.
Refined copper was selling for $2,860 on the London Metal Exchange on Friday, $235 more than scrap.
Scrap Traders
European scrap traders oppose the smelters' request. The U.K., whose last copper smelter closed five years ago, was the world's fifth-largest exporter of copper scrap in 2002, according to data from the International Copper Study Group, based in Lisbon.
``There's a notable shift to the Pacific Rim and you can't stop that,'' said Peter Mathews, 57, managing director of Black Country Metals, a scrap trader based in Stourbridge, England. ``We should be allowed to move our material internationally.''
The Copper & Brass Fabricators Council Inc. and the Non- Ferrous Founders' Society, which represent U.S. copper buyers, have petitioned the U.S. Commerce Department to restrict exports of scrap copper and copper alloy to China. The department has more than three months to respond.
The U.S. is the biggest producer of copper scrap. Exports climbed 35 percent last year to 688,978 metric tons, with 70 percent going to China, according to government figures. U.S. production of refined copper from scrap ended in 2001, when Chemetco Metal Co. closed its plant in Illinois. Bloomberg