China’s new scrap import quota system has dramatically changed non-ferrous scrap flows in Japan. Probably some 10,000 to 15,000 tonnes of copper cable scrap was previously exported to China each month but this has either been redirected to Malaysia, partly with unclear import channels, or transformed into granules and exported to China, which could be reduced by Chinese quotas. Electric motor scrap has also been shifting from China and South Korea to Malaysia.
Any other low-grade copper scrap - including residual materials previously heavily dependent on exports to China - is flooding the market and seeking out any smelter to receive as much as possible. Local rolling mill production has begun to slow, impacted largely by a reduction in mobile phone sales after a boom lasting several years.
Demand among domestic aluminium mills has been slowing, mainly due to the slump in the local automotive industry. Aggressive selling of imported ingots/alloys has been giving local alloy producers a hard time. The local scrap market is largely supported by aggressive pricing from overseas, such as China, South Korea and Malaysia.
The emergence of a giant Indonesian stainless steel mill has been accelerating the consolidation of local mills, but more is seemingly needed for even higher efficiency. The local stainless steel scrap market is tending to become depressed. Many local mills have regularly closed their buying windows before enough scrap has been delivered, with a large Korean outlet often following suit. It is especially difficult to find enough outlets for 400 series scrap.
Metal Solution Provider (JPN), Board Member of the BIR Non-Ferrous Metals Division