Abolishment of scrap licensing system by China may have narrow price impact

The Chinese Ministry of Commerce’s decision to abolish the import licensing system for copper, aluminium and steel scrap may have limited impact on prices, according to industry sources

SHANGHAI (Scrap Monster): The Chinese Ministry of Commerce’s decision to abolish the import licensing system for copper, aluminium and steel scrap may have limited impact on prices, according to industry sources. By and large, the move is expected to benefit the scrap metal trading sector. The Ministry on August 26th had announced the ending of licensing system to come into effect Sept 1 onwards.

In theory, with the abolition of licensing system, the customs clearance times for inbound scrap shipments are expected to fall significantly. The extent of time savings needs to be seen once the policy is actually implemented.

The new move by the Ministry is expected to simplify the import approval process, accelerate customs clearance and cut importing costs. At the same time, the scrap imports would continue to be controlled by other stringent environmental protection rules.

Meanwhile, the scrap traders in China and North America said the end of the import license would not significantly impact their scrap trade volumes. The import volumes are primarily controlled by the quota limits set for the year. The volumes also depend on a number of other market factors as well.