THE government is expected to drop a requirement for buyers to obtain annual approval to import some types of scrap metal, such as high-grade copper and aluminum, starting from next year, three industry sources said.

    The move will affect so-called category 6 scrap, which also include brass and bronze that some refined copper producers and semi-finished products makers use as feed for production.

    It could increase imports of scrap, of copper in particular, as importers would have more flexibility to place orders when prices are favorable, the sources said.

    Currently, importers are required to seek approval from the Ministry of Environmental Protection in the fourth quarter for supplies in the coming year. The volumes could be cut if the purchases in the year were below the approved amount.

    Some importers had been notified by local environmental authorities about the cancellation, said an executive at a copper producer, which is an authorized copper scrap importer.

    The second source, a trader at a Western supplier of copper scrap, said three clients had said that the requirement for yearly approval would be cancelled from Jan. 1.

    The Ministry of Environmental Protection did not immediately respond to a request for comment.

    “The cancellation may not have much impact in the short term because domestic copper demand is weak,” said an executive at a Chinese scrap processing firm, which is authorized to import copper and aluminum scrap.

    Importers of copper scrap, including refined copper producers, have lobbied the government over the issue in the past two years due to insufficient supplies in the domestic market, the sources said.

    A shortage of copper scrap has forced big refined copper producers, such as Jiangxi Copper and Jinchuan Group, to cut production that use scrap as feed, sources at the two companies said.

    Many small plants that use copper scrap to produce anodes used for refined copper production have closed since last year, people in the industry said.

    About a quarter of China’s refined copper production was made from scrap, said Yang Changhua, chief copper analyst at State-backed research firm Antaike. The ratio could reach to about a third if Chinese producers have sufficient scrap as feed.

    Still, importers were finding it difficult to buy copper scrap on the international market as low metal prices were prompting suppliers to limit sales, Yang said.

    China’s imports of copper scrap fell 6 percent to 2.68 million tons in the first nine months of the year.(SD-Agencies)