China's scrap copper imports set to slump over US trade worries, analysts say
Nov 28 (Reuters) -China's imports of scrap copper are set to slump as some traders have suspended buying from the United States, the top supplier, due to worries about rising trade tensions under a Donald Trump presidency, analysts said.
Trump, who takes office in January and has threatened tariffs of 60% on Chinese imports, on Monday pledged to impose "an additional 10% tariff" on imports from China, raising the prospect of retaliatory measures from Beijing.
"According to our survey, most domestic import traders have already stopped directly buying scrap copper from U.S. ... And this is especially true among the leading traders who have relied on imports from the U.S.," analysts at information provider Shanghai Metals Market (SMM) said in a note on its WeChat account on Thursday.
Zhao Yongcheng, principal analyst at consultancy Benchmark Mineral Intelligence (BMI), said Chinese scrap importers were buying cautiously on concerns that growing uncertainties over U.S.-China trade could increase their procurement costs.
China imported 361,099 metric tons of scrap copper from the U.S. in the first ten months of the year, accounting for nearly a fifth of total such imports, Chinese customs data showed.
Less buying from the U.S. will crimp China's scrap copper imports and spur consumption of refined copper at a time when supply of scrap copper is already tight, SMM analysts said.
BMI's Zhao said the impact would likely be reflected in import data from next year.
"It takes time to find alternatives to completely offset the reduced supply from the U.S., so tightening scrap supply will likely aggravate the copper price volatility in the short term."
"But higher scrap prices will spur domestic supply increase," he said.
Beijing announced in late October that it would allow imports of more recycled copper, or scrap copper, from Nov. 15 as part of efforts to develop its recycling industry and reduce dependence on primary raw materials.
Scrap copper can be remelted into refined copper and processed into copper products.
Reporting by Amy Lv in Beijing and Mai Nguyen in Hanoi. Editing by Tony Munroe and Mark Potter
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