Nonferrous

China has long been a robust market for copper scrap, especially for wire and cable scrap exported from North America and Europe.

But a new import duty taking effect this summer in China could change that scenario. One broker says the Chinese government has decreed it will tax all copper scrap shipments (including wire and cable) as if they contain a minimum of 70% copper by volume.

The duty at that rate, if enforced rigidly, could halt the export of lower grade wire and cable shipments into China. The broker says although the government decree specifies copper, there are concerns it could broaden to include aluminum cable shipments.

The government edict took effect while many shipments were already en route on their four to six-week journey to China, thus ensuring a loss on some trades.

Meanwhile, “there’s no business right now; very little is happening in export brokerage offices while we hold back on our buying to see how this affects us,” says the broker.

Should China, in practice, adhere to the law as written, it may have a severe impact on lower grade wire and cable markets, as China has been a major consumer.

Some are unsure if price pressure on higher-grade wire would rise, as exporters focus more on that market, or whether price trends there will also be down as all wire and cable suffers together.