Japanese Mixed Metal Scrap Export Shows Recovery Sign to China

Japanese export of mixed metal scrap, excluding shredder dust, bound for China shows a recovery sign. Bulk carriers’ demurrage is gradually solved at Chinese quays and Japanese exporters are restarting scrap shipment. However, many Japanese exporters suppose Chinese actual demand for metal scrap still maintains weak. Japanese exporting price levels off due to tax base upsurge at Chinese customs. Japanese export of mixed metal scrap and copper scrap would upturn in late April at earliest.

China accounts for 90% in Japanese copper scrap and mixed metal scrap export. In February, large-quantity copper scrap arrived at Chinese quays, contracted in January, though labors were short in the coastal areas around Chinese New Year holidays. This situation and the bad weather near China caused the serious demurrage. Japanese scrap exporters were suffered from few bulk carriers.

One Japanese major exporter who visited China this month said cargo discharge lead time is presently shortening to about 3 days from about 10 days in mid March. Another exporter explained they could charter a bulk carrier at the end of March and ship scrap contracted in early March.

However, many exporters indicate Chinese actual demand bottomed out but still maintains inactive for mixed metal scrap and copper scrap. One factor is the upsurge of tax bases. In China, tax base is different by each custom and each scrap item. Chinese importers are obliged to pay 17% of value added tax based on the tax base. Tax bases are currently increasing to reflect high copper market price.

Chinese importers seem to lower the scrap purchasing price in order to cover the upsurge of value added tax. Japanese exporters now purchase industrial mixed metal scrap at 50-55 yen per kilogram, non-shredded brass based mix scrap, with relatively less iron and stainless steel, at 400-420 yen per kg and thin electric wire scrap with insulator (containing copper at 40-42%) at 270-280 yen per kg.

The export price is leveling off although electrolytic copper market price rose by about 10% in a month.