NEWS
23
2023
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02
Looking at the future development of the scrap copper industry from the perspective of Caishui Document No. 40
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The Announcement on Improving the VAT Policy for Comprehensive Utilization of Resources (Announcement No. 40 of 2021 of the State Administration of Taxation of the Ministry of Finance) issued by the Ministry of Finance was officially implemented. Due to the many changes, high professionalism and great impact on taxes and fees, it has attracted widespread attention in the industry, and has also triggered a series of changes and improvements in the recycled copper industry for subsequent recycling, production and processing, and sales. In order to understand the real response of recycling enterprises, we followed the team to several renewable resource processing enterprises in Fengcheng, Jiangxi and Shangrao, Jiangxi, from which we learned about the specific situation after the implementation of the policy.
The new policy has little impact on Jiangxi Fengcheng and Shangrao orders
Jiangxi is one of the concentrated copper enterprises, and Fengcheng City and Shangrao City are also local cities with key preferential treatment for the recycling industry. This time, we investigated seven companies in two cities, mainly producing recycled copper rods, copper strips, etc., with an annual production capacity of 200,000-300,000 tons. According to the person in charge of the enterprise, the new policy for the entire production chain, more affect the procurement end and output, the actual impact on the order is not much, and the current order situation is still very optimistic.
For procurement, due to the strict demand for tickets under the New Deal, there are fewer enterprises that can issue 3 votes, and the higher costs faced by processing enterprises by the New Deal also need to be transferred, and the difficulty of transferring to the downstream is higher, because recycled copper rods need a certain price advantage over fine copper rods, so they can only turn to upstream recycling enterprises, further aggravating the difficulty of procurement, and the external ticket reporting points of enterprises have also increased.
It is understood that the purchase of recycled copper by enterprises generally comes from the domestic market, because from the perspective of internal and external ratios, the whole year is not conducive to imports, for example, the previous market makes the import loss larger, more from the domestic scrap copper trading companies or recycling station retail investors layer by layer to receive goods. Although electrolytic copper has an alternative role, electrolytic copper is difficult to enjoy policy preferences and can only be used as the general input of enterprises, so generally speaking, procurement is basically not carried out. From the perspective of taste, the recycled copper received by several enterprises surveyed is generally high, basically involving cable thickness, bright copper, etc., and copper rice is generally not used due to large losses. Due to unclear policies, enterprises have also correspondingly reduced production, raw material inventory is basically only maintained for a week or even 2-3 days, finished product inventory is mostly ordered but not picked up inventory, own inventory is less. According to the company, their current capacity utilization rate has declined significantly, and serious enterprises have fallen by nearly half, and production has decreased. The main thing is that the current new policy rules are not clear, in order to reduce unknown risks, enterprises can only choose to maintain the supply of long orders, especially mentioned that the detailed rules require supplementary payment of taxes and fees after three months, then the company faces the more production, the more supplementary payment, the greater the loss, so generally choose the appropriate amount of production.
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