Introduction to scrap copper

According to the different stages of copper scrap, it can be divided into three categories: the primary scrap produced in the industrial production process, the new copper scrap produced in the processing process and the old copper scrap produced after the consumer uses it.

Primary scrap copper generally refers to unqualified anode, cathode and blank, as well as anode waste. These wastes can not be further processed or sold. They are usually returned to the previous process. Substandard copper is usually returned to the converter or anode furnace for electrorefining, and the defective billets are remelted and recast. One time scrap copper is generally not "out of the house" has been recycled, basically not into the scrap copper market.

New scrap copper refers to new scrap or scrap produced in the factory. This kind of waste copper is produced in the process of processing, and the main difference between it and primary scrap copper is that it may have been doped in the process of alloying or covering. The way to deal with new scrap copper depends on its chemical composition and its combination with other materials. The simple method is internal recycling, which is a common practice in the casting process, and only needs remelting and recasting. More than 90% of the new waste will be recycled by the plant or recycled from upstream, and will not flow to the market.

Old copper scrap mainly comes from the five terminal areas of electric power, home appliances, construction, transportation and mechanical electronics. It refers to the copper metal obtained by recycling or dismantling waste copper containing products.

In this regard, we are concerned about the main body of the old waste. According to the different composition, scrap copper mainly includes: No.1 copper wire, No.2 copper wire, special purple copper, No.1 purple copper, No.2 copper rice, No.2 copper meter, thin copper plate, waste copper foil, brass waste, waste brass, waste brass casting, waste red brass, brass shaft sleeve, waste brass tube, waste Navy brass tube, waste aluminum brass tube, copper water heating parts, waste brass mixture and shell Shell, shell with fuze, bullet shell, zinc copper scrap, etc.

domestic market

China's scrap copper industry is mostly concentrated in the form of parks, which are managed by the local government, including Tianjin Ziya circular economy industrial zone, Guangdong Qingyuan Huaqing circular economic Park, Hunan Miluo Tongli Circular Industrial Park, etc.

China's scrap copper market is mainly concentrated in Yangtze River Delta, Pearl River Delta and Bohai rim. Generally speaking, the developed areas are also areas with large copper production. At present, China has formed three key copper scrap dismantling, processing and consumption areas, including Yangtze River Delta, Bohai rim and Pearl River Delta. The amount of copper scrap recovered in these areas accounts for about 80% of the total domestic copper scrap production.

Among them, the Yangtze River Delta region is represented by Taizhou and Ningbo in Zhejiang Province, the Pearl River Delta is represented by Guangdong Province, and the surrounding areas of Bohai Sea are represented by Tianjin, Hebei and Shandong Province. A number of professional scrap copper markets with large amount of dismantling and trading volume have been formed, such as Taizhou Luqiao in Zhejiang Province, Anxin in Hebei Province, Qingyuan in Guangdong Province, Yixing in Jiangsu Province and Suzhou city.

The scrap copper markets in Guangdong, Zhejiang and Tianjin are mainly imported scrap copper dismantling, while the scrap copper markets in Linyi, Shandong, Baoding in Hebei and Miluo in Hunan are mainly domestic scrap dismantling.

Copper scrap manufacturers will perceive the market tension through the price difference of refined scrap, so as to guide their own speed of import and shipment. If the price difference of refined copper becomes larger and exceeds the reasonable price difference substantially, the purchase of scrap copper will be increased, which will make the price difference of refined copper fall down. After the price difference falls down, the demand for refined copper will increase again, making the price difference of refined waste stabilized.

Supply situation

The supply areas of scrap copper are mainly concentrated in the developed countries in Europe and America, which have earlier industrialization. According to the report of the United Nations data and Statistics Center, China was the world's largest importer of scrap copper from 2013 to 2017, with a total import volume of US $48.371 billion, followed by Germany with a total import volume of US $14.04 billion, followed by South Korea, Belgium and Japan with a total import volume of US $8.295 billion, US $6.405 billion and US $4.873 billion respectively.

Malaysia is one of the largest waste importing countries in Southeast Asia, and its legal system of waste management is relatively perfect. According to the law, in addition to certain qualifications, importers and exporters are generally required to submit application forms, licenses, sources of waste, contracts between importers and exporters, contracts with owners of waste treatment / recovery facilities, data of appraisal agencies, bank guarantees, etc.

Since the implementation of green barrier action by China Customs in 2013, the import volume of scrap copper in China has been declining year by year. Copper prices rose sharply at the end of 2016. As the cost of scrap copper was lower than that of refined copper, downstream consumption continued to improve, and copper scrap demand increased accordingly. In 2017, scrap copper supply rebounded.

According to the data released by the General Administration of customs, the import volume of copper waste and scrap in July was 75113 tons, a month on month increase of 9.26%, a year-on-year decrease of 41.1%; from January to July this year, the total import of copper waste and scrap materials was 505731 tons, a year-on-year decrease of 47%. With the issuance of new approvals, although the quarter on quarter (quarter on quarter) continued to decrease, many small and medium-sized processing enterprises could still be replenished in the short term. The impact of superimposed overseas epidemic on the scrap copper supply chain was gradually eased, and the import volume of scrap copper increased month on month in July, but the import volume was still relatively small, far below the level of the same period last year.

China's scrap copper supply is relatively dependent on imports. However, in recent years, with the stricter import policy and the gradual improvement of the domestic scrap copper market, the proportion of imported scrap copper has decreased from 80% to about 50%. In particular, the domestic scrap copper market is more self-sufficient due to the interference of epidemic situation and policy changes this year.

As of August 28, the CIF quotation of 1 waste copper is the December contract price of American refined copper, 30 cents / pound is deducted from the CIF quotation of waste copper, 40 cents / pound is deducted from the contract price of American refined copper in December, and the deduction is greatly expanded by 7 cents / pound compared with the goods arrived in Hong Kong before September. At present, scrap copper can only be imported through the use of approval documents, while most domestic enterprises lack import approval documents, and small and medium-sized enterprises have consumed a considerable part of the approval quota, which makes the market participants more restricted. In addition, foreign shipping companies fully comply with the provisions of the new solid waste law in September, and do not recognize the way of using approval documents to import solid waste. Various factors lead to the import of scrap copper market in September Low price, low price. When the implementation date of the standard for recycled copper is not heard, the new solid waste method has a greater inhibition on the import enthusiasm.

Review of copper scrap policies in recent three years

In July 2017, the implementation plan for the reform of solid waste import management system by banning the entry of foreign garbage: it is necessary to gradually and orderly reduce the types and quantities of solid waste import, and gradually stop importing solid waste by the end of 2019.

In April 2018, the announcement on adjusting the catalogue of imported waste management: the waste electrical machines, including waste motors, wires, cables, hardware and electrical appliances (waste category 7), which are mainly used for recycling copper, will be transferred from the catalogue of imported solid wastes that can be used as raw materials into the catalogue of prohibited solid wastes, which will be implemented from December 31, 2018.

In August 2018, the Ministry of Commerce imposed a 25% tariff on us scrap copper (mainly due to the trade war);

In December 2018, the announcement on the adjustment of the catalogue of imported waste management: the copper waste and scrap (waste category VI) will be transferred from the catalogue of solid wastes that can be used as raw materials in the non imported category to the catalogue of solid wastes that can be used as raw materials in the imported category, which will be implemented from July 1, 2019.

In January 2020, the State Administration of market supervision and administration of the people's Republic of China and the State Administration of standardization promulgated the standard details of GB / T 38470-2019 (recycled brass raw materials) and GB / T 38471-2019 (recycled copper raw materials).

In addition to the specific provisions on copper content of red copper and brass, the standard details of recycled copper raw materials and recycled brass raw materials issued by the national standards committee also specify the inclusion content and moisture content.

Among the six kinds of scrap copper, copper and brass account for 60% and 40% respectively, and metals account for 73% and 27% respectively. Other low-grade scrap copper such as circuit board can be ignored. The average grade of imported copper and brass is 96% and 55% respectively, and the average grade can reach 79%. It can be seen that the structure of the imported scrap copper has been optimized, and the low-grade scrap copper is less. The calculation results show that the waste copper with 91.62% metal content can meet the new standard of recycled (yellow) copper, of which 96.72% of red copper and 78.51% of brass can meet the standard.

The detailed rules for the import of recycled copper are still pending. There is no official statement on the detailed rules for actual import. The waste recycling enterprises have not received the relevant new notice. The delay in the import of recycled copper has basically become a fact. There are more opinions in the market that the standard of recycled copper import will not be used until September.

Review of relevant tax policies

In 2001, China began to exempt the value-added tax on copper scrap sold by recycling enterprises; on December 9, 2008, the State Administration of Taxation issued a notice to cancel the VAT exemption policy for waste materials from January 1, 2009. In 2009-2010, the policy of levying and retreating the value-added tax on waste materials was adopted. In 2009, the value-added tax was returned to the taxpayer at a rate of 70%, and 50% in 2010. On December 27 of the same year, the Ministry of Finance announced the abolition of the VAT rebate policy for scrap copper. On June 26, 2015, the Ministry of Finance and the State Administration of Taxation jointly issued the notice on printing and distributing the catalogue of value added tax on products and services for comprehensive utilization of resources. Among them, 30% of the VAT will be refunded to the recycling copper enterprises.

After VAT rebate, the central government and local governments will share the tax according to a certain proportion (7.5:2.5 before replacing business tax with value-added tax, and 5:5 after replacing business tax with value-added tax), and local governments will refund tax according to a certain proportion. According to our understanding, the tax rebate policies of local governments in Jiangxi and Anhui are preferential.

China's "2007 tariff implementation plan" has been approved and implemented since January 1, 2007. Among them, the tariff on copper scrap will be reduced by 0% from 1.5%, which is intended to encourage China's waste copper import. In 2020, the provisional tariff rate of copper scrap and scrap will remain unchanged at 0%, the tariff rate of * * Huiguo will be 1.5%, and the value-added tax will be 13%.

The domestic scrap copper system is not perfect. Scrap copper traders, dismantling plants, scrap rod mills and other scrap copper enterprises generally do not include tickets for domestic scrap copper transactions, except for imported scrap copper dismantling plants. Large enterprises often need to issue VAT invoices when purchasing scrap copper, but these scrap copper suppliers are often not qualified to issue invoices, which makes false VAT invoices constantly occur in the scrap copper field.