China's copper scrap imports rose sharply in September, supported by improved import economics, robust demand for tax-compliant material and the arrival of previous shipments delayed by adverse weather. Although tighter import margins and tax policy uncertainty may weigh on October volumes, imports are expected to remain relatively high amid sustained demand from downstream processors.
China imported 236,600 tonnes of copper scrap in September, increasing by 33.37% month on month and 28.55% year on year, according to data from the General Administration of Customs of China (GACC). Total imports reached approximately 1.87 million tonnes in January-September, up 10.5% from around 1.70 million tonnes a year earlier. Thailand, Japan, Spain and the UK were China's four largest sources of copper scrap imports in September, collectively accounting for 39.59% of the monthly total.
Source: GACC
Three key factors drove the sharp increase in imports in September. First, domestic prices generally fluctuated upwards during the month, improving the relative economics of copper scrap imports. Once import margins turned positive, traders stepped up price-locked purchases and restocking, directly boosting import volumes. Second, China's tax policy adjustments continued to affect the availability of compliant domestic copper scrap. Consequently, downstream scrap processors maintained strong demand for tax-compliant imported copper scrap. Third, frequent typhoons disrupted coastal areas of China in August, delaying the schedules of some shipments. A substantial volume of previously delayed cargoes arrived in September, further lifting the month's import total.
Looking ahead, China's copper scrap imports are expected to remain relatively high in October, although volumes may edge down from September. Increased copper price volatility has made import margins less consistently attractive than they were in September, while continued uncertainty over domestic tax policy has encouraged a more cautious approach among market participants. Nevertheless, firm demand for tax-compliant copper scrap is expected to provide support for import volumes. Overall, October imports are forecast to decline slightly month on month but remain elevated compared with historical levels for the same period. Market participants should closely monitor changes in tax policy affecting the copper scrap sector, overseas scrap availability and copper price movements, all of which could influence import profitability and subsequent shipment volumes.
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Written by Mingyuan Wang, wangmingyuan@mysteel.com
