Green Light Given to Short Supply Petition Targeting China

The U.S. Department of Commerce formally initiated an investigation into alleged excessive copper scrap and copper-alloy scrap exports to China and their impact on shortages and price increases in the U.S. market.

The initiation notice as published in the Federal Register April 23 includes a timetable of actions to be undertaken during the course of the investigation.

July 22 is listed as the deadline for the Secretary of Commerce to determine if export monitoring and/or controls are in order. A period of public comment follows an affirmative determination with implementation of final regulations scheduled for September 7.

Written comment deadlines and a hearing occur during May and June.

The announcement is the result of an April 7, 2004, petition filed by two metals industry groups that requests the U.S. government to temporarily monitor and restrict U.S. exports of copper scrap and copper-alloy scrap.

The petition, citing the Export Administration Act as the legal authority, points to rising demand in China as responsible for the excessive drain of the scarce metals materials and the resultant price increases and shortages in the U.S. market.

Co-petitioners Copper and Brass Fabricators Council, Inc., and the Non-Ferrous Founders' Society charge that China's explosive growth, insatiable demand for scrap, and high prices that Chinese purchasers are willing to pay to source U.S. scrap have resulted in the current, critical short supply situation in the domestic market.

U.S. groups are not the only group complaining about the surge in shipments of ferrous and nonferrous metals to China.

During a recently held trade show in Europe a host of metals executives noted that many Chinese firms are benefiting from unfair trade measures, including VAT reimbursement to local importers or tariffs on raw material and scrap exports.

According to an article in Reuters, any steps to be taken by European countries are in their infancy. “China is not just a threat, but an opportunity for our manufacturing companies. We export more than we import from China,” said Stefano Saglia of the Industry Committee in Italy’s Chamber of Deputies.