NEW YORK Chinas Operation Green Fence, which has stepped up enforcement of restrictions on raw material imports, has caused an oversupply of shredded aluminum scrap in the United States, sources told AMM.
Export prices for zorba have weakened over the past seven to 10 days as a result, some market participants have said.
Picked-up prices for 90-percent metallic units with 3-percent red metal hovered around 73 to 74 cents per pound, down 1 to 2 cents from two weeks ago, exporters said.
The consuming community hasnt changed; domestic demand on scrap is all the same, one zorba buyer told AMM.
My major suppliers are telling me they cant get zorba out of the country. Prices are dropping because demand coming from the export market is not there.
He also indicated that tags for upgraded aluminum shred products, namely twitch, were starting to slip also. We are without a doubt seeing twitch prices coming off, and its not because demand is down, he said. With zorba flooding the domestic market, there will be excess amounts of twitch being manufactured, which will in turn bring prices down.
One exporter told AMM he was instructing employees to triple-inspect zorba destined for ports in China. If you are not keeping it cleanas in 90-percent metallic and without junk like rocks, foam and circuit boardsits going to get rejected, he said, adding that shipping zorba to China has become very labor-intensive in recent weeks. What should take one phone call now takes a dozen, he said.
It was getting harder to export zorba in March and April, and now things are getting really hard, a second exporter said. I think a lot of the Chinese buyers who are out of the market just dont understand how the restrictions work. Its not black and white right now; its all shades of gray.
Others said that because Chinese buyers had exited the market, sellers were increasingly looking to ship product to domestic consumers.
We are getting much larger offerings of zorba these days, one buyer said. The amount wanting to be sold has increased dramatically over the past month. The heat is still on in China, and some people dont know what to do with their excess product.