Three sources familiar with the matter told Reuters,RussiaTo avoid taxes and avoid the impact of Western sanctions, Copper Corporation (RCC) and Chinese companies disguise new copper materials such as copper wires and rods as scrap metal for trading.
Sources said that a middleman in remote ChineseXinjiangThe Uyghur Autonomous Region shreds copper wires and rods, making them indistinguishable from scrap metal, allowing both importers and exporters to borrow scrap metal and new metal products.TariffBenefit from differences.
In December last year, the tariff on copper rods exported from Russia was 7%, lower than the 10% on scrap metal, China imposed a 4% tariff on imported copper rods, while not taxing scrap metal imported from Russia. I went.
China’s scrap copper imports from Russia have increased significantly since December last year, Chinese customs data shows. However, information obtained by Reuters from commercial data agencies shows that Russia exports very small amounts of scrap metal to China.
When asked about the status of copper bar trade with Chinese companies, the Russian Copper Company, which is sanctioned by the West, replied that it supplies products only to Russian companies. The company had no further comment.
According to sources, the copper smashing action went unnoticed as China responded to international condemnation of its crackdown on Uyghurs by restricting access to the Xinjiang region.
China imported large quantities of copper scrap from Russia in December last year, with 97% (6,434 metric tons) of it being shipped through the city of Alashankou on the Xinjiang border that month.
In addition to the financial incentive to avoid taxes, shredded metal is also harder to identify and track, making it easier for Chinese manufacturers to sell.
China’s purchases of metal products from Russian companies subject to Western sanctions will theoretically not face legal obstacles. Although some buyers may want to avoid providing any funds to Russia so as not to lose the opportunity to do export business with these buyers, Chinese manufacturers may still act cautiously.
“The Russian scrap metal is actually copper rods, but it is not declared as copper rods,” said a Chinese manufacturing source requesting anonymity. It is reported that these metals can be sold directly to copper processing plants in Jiangsu and Zhejiang provinces.
After Russia launched a full-scale invasion of Ukraine in February 2022 and was consequently sanctioned by the United States, China became the main destination for Russian companies to export goods.
China