Copper wires produced in Russia are claimed as scrap metal in China

It has found that new copper wires produced in Russia are qualified as scrap metal shortly after arriving in China.

According to the sources, the copper wires supplied by the Russian concern “Russian Copper Company” (KVK) are being crushed in the Xinjiang Uyghur Autonomous Region in northwest China, which borders Russia. Thus, copper wires, which are usually supplied in coils, resemble scrap after such treatment.

“This scrap from Russia in fact are copper wires but not declared as wires. I can’t divulge details,” said a source in China who spoke on condition of anonymity.

Hiding the supplies to China has until now been possible because Beijing had previously restricted access to the region in response to international condemnation of its crackdown on the Uyghurs.

At the same time, Russian and Chinese companies have benefited from tariff differences by recycling copper as scrap metal.

Russia’s export duty on copper bars was 7% in December 2023, while the export duty on scrap metal was 10%. On the other hand, the import of copper rods in China is taxed at 4%, while the import of scrap metal from Russia is not taxed.

Export and import data do not match

According to information obtained by Reuters from an independent source, in December 2023, Chinese companies purchased five products labeled as “copper rod” from the KVK plant in the Urals – “Kyshtym Copper Electrolyte Plant JSC”. In the same month, 8,041 tons of copper bars were delivered to China from this plant through Alashankou, compared with 1,618 tons in November. Proceeds from these purchases, made by Modern Commodity Trading DMCC, registered in the United Arab Emirates, amounted to about $65 million, according to Reuters.