Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Non-ferrous scrap imports in Henan, China are likely to be impacted over the next few days due to heavy flooding in the province. The Chinese Meteorological Administration has predicted that rainfall in Henan, particularly around Zhengzhou will continue over the next couple of days.


Henan is home to several secondary aluminum and recycled copper producers and the inclement weather has not only impacted their output but has also caused some firms to shut down after flooding at their plants. On Tuesday, Dengfeng Power Group halted operations at its aluminum alloy unit following an explosion caused by flooding. The facility produces high silicon aluminum alloys, titanium products, and alloy rods and has a capacity of producing 60,000mt of these products per year.


The water accumulation in Zhengzhou, Pingdingshan, and other areas has also affected supply and has disrupted the production of aluminum strip manufacturers in Gong Yi, Luoyang, and Changee who have suspended new purchases or reduced production due to flooding. These along with other aluminum scrap consuming companies have also had to differ their scrap buys due to the floods that have made transporting the material extremely difficult.


In Changee, companies are less affected due to the higher altitude with a lower impact on production and procurement. Still, the Chinese authorities shared that though the intensity of the rain has reduced in Changee, some factories have stopped work. 


According to the team at Fubao Copper in Xinxiang, Henan, recycled production is affected by heavy rains and the topography of the area that has flooded the region. On the other hand, the Henan Gongoyi recycled copper factory is lightly affected and is maintaining normal production as the other secondary copper producers evaluate the impact.


Henan has witnessed persistent rain since Jul 18. Per media reports, about 100,000 people have been evacuated from low-lying areas and the floods have caused 12 deaths in Zhengzhou city. 

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