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Port authorities in China are close to clearing the backlog of vessels that has built up mainly in the south of the country following a major crackdown on importers trying to avoid complying with new duties, trade sources said.
About 1,000 containers are left to unload compared with more than 6,000 two weeks ago, traders said.
"The ports have really started to get containers moving and there about 1,000 left," a source at one scrap company said. "Chinese buyers are back in the market and buying vigorously. They're quoting for all types of material like birch, cliff, honey and mixed borings."
With consumers in China, the largest buyer of scrap over the last few years, now returning to the market, spreads for many grades of copper scrap have narrowed.
No. 1 copper is trading at about 20 US cents under the December contract on the Comex division of the New York Mercantile Exchange compared with more than 30 cents under last month, while No. 2 copper is about 45 cents under, trade sources said.
Spreads could narrow further if business activity in China picks up as expected during the fall months, which are traditionally heavy buying periods for many consumers in China as they look to take delivery of material before the Chinese New Year.
"There still isn't an abundance of scrap around in the US because of the slowdown in manufacturing and with the Chinese now returning to the market we're going to see prices kick right back up," another scrap trader said.
Chinese buyers were absent from the market for more than two months while Customs officers launched a major offensive against importers trying to avoid complying with new duties.
The purge followed a widespread practice among many Chinese importers of mixing low-purity scrap with higher purity material to avoid paying higher taxes.
Southern China - and, in particular, Guangzhou, the capital of Guangdong province - were the worst hit, traders had said previously.
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