Nonferrous Scrap, China

There are several big changes in the procedure for handling shipments coming into China. The new regulations are calling for no mixed items in containers. Shipments with two different types of material must be split accordingly. This gives us headaches and increases handling costs. Also, all the inbound shipments getting released must be out of certified plants or factories. This is causing delays because of more detailed, thorough inspections of material.
In northern China, the banking facilities are limiting the amount that can be borrowed and are raising interest rates. This also gives importers and consumers difficulty.

In July there was a high speed train crash. The infrastructure development is slowing down because of this. Because of all of this, this year will not see big movement in metals prices. Hedge fund traders are really in the driver’s seat, not consumers. It is a tug of war between the traders and the physical consumers.

It is a difficult time for any expansion. Steel mills and stainless steel producers are well overcapacity and so are some of the copper producers. It is a sign of slowing down. I think this is good, otherwise, the bubble is going to burst.

The German and Scandinavian markets are pretty strong. A lot of material, especially high-copper and high-precious-metal content material is staying in Germany. China’s prices are about 10%-20% below the German market price.

The aluminium market is getting better now that Japan is buying again.

David Chiao, Uni-All Group Ltd. can be contacted at uniall@yahoo.com.