China Copper Smelters Bracing for Shortage of Vital Scrap Metal

(Bloomberg) — Chinese copper smelters are bracing for a potential shortage of scrap metal as Beijing’s efforts to create a level playing field have the unintended effect of reducing supply.

The Fair Competition Review regulation, due to take effect in August, forbids tax benefits without either approval from the State Council or permission by existing law. Many of China’s copper scrap processors rely on tax rebates from local governments, so may have to cut production, which will hit smelters that need the feedstock to make refined metal.