NEW YORK Export prices for shredded aluminum scrap, known as zorba, have remained essentially flat since the beginning of April, with shippers increasingly seeking new ways to meet stepped-up restrictions on imports in northern China, sources say.
Picked-up prices for 90-percent metallic units with 3-percent red metal hovered around 74 to 75 cents per pound, unchanged from last months price, market participants said.
"The port of Ningbo (in China) is applying a very strict standard right now," one exporter said. "They have put a restriction on shipments of loose material. I have heard that some people are shipping in super sacks to get the material through inspection."
"Using a super sack is much more expensive than loading the material loose," a second exporter said. The process of loading and unloading a super sacka large, recyclable plastic bagis more labor-intensive than the alternative, but it potentially circumvents the loose-material clause currently being enforced in most northern Chinese ports.
"I would estimate the cost of using a super sack could be around 1 to 2 cents per pound," a third exporter said. "The zorba market is extremely competitive; I cant imagine that people shipping with super sacks could maintain any kind of margin."
Others indicated they had begun to halt shipments of zorba to northern China for the foreseeable future. "The Chinese authorities in the north are getting much stricter," the second exporter said. "As a result, there have been hold-ups in containers and increased vigilance on inspections. We will only ship zorba to southern China at this point."
The restrictions, known as "Operation Green Fence" (amm.com, April 15), have led some shippers to eye other international markets as potential alternatives to China.
"I know that shipments to India are increasing because of Green Fence, though I am not sure India has the same type of demand at this point," a third exporter said.
Meanwhile, U.S. domestic prices for zorba are about 2 to 3 cents per pound lower than export tags, sources said.
"We are seeing picked-up prices in the 71- to 72-cents range," one trader said. "Most feel that its still more attractive to send the product overseas."