Nonferrous scrap traders in China could be facing a major disruption in business if the proposed Chinese trade regulations come into practice, said Ma Hongchang, a consultant in Chinese affairs for the Brussels-based Bureau of International Recycling (BIR) at the Non-Ferrous Metals Division meeting held during BIR 2017 World Recycling Convention in Hong Kong on 22-24 May.
On 18 April, 2017, China’s Central Committee expressed its intention to introduce a policy to create “a drastic reduction in both the quantities and items [of scrap] imported [into China].”
Recently, there was a raid on plastic and metals recycling firms in provinces and cities of China through the multi-agency National Sword campaign to investigate smuggling activities.
“As far as I know, regarding nonferrous metal scrap, scrap motors, scrap wire and cable and mixed metal scrap will be prohibited after the end of 2018,” Ma stated.
He said China’s customs agency “will deepen its campaign against foreign [materials] in 2017 in cooperation with China’s Ministry of Environmental Protection [MEP] in order to fight environmental risks allegedly created by metal recyclers.
BIR Non-Ferrous Division Chairman David Chiao said BIR is working with Institute of Scrap Recycling Industries (ISRI) and China’s CMRA (which represents nonferrous scrap recyclers) to find a solution to the issue that could be “a severe threat” to the current scrap trading business.
John Browning, from Hong Kong-based BANDS Financial Limited said, “Base metal prices have started a long-term cyclical upturn.” Part of the reason, according to him, is China’s “One Belt One Road” spending initiative, which encourages large scale metals-consuming infrastructure projects.
On a positive development, current global demand scenario is also helping metals producers catch up with the excess capacity of the past several years, he said. Browning added that while metals production capacity has increased, mining expansions were not growing as such which brings good news for scrap traders.
Our data shows a declining trend in aluminium scrap import in China. The amount is estimated to dip further in 2017.
{googleAdsense}
Masao Montani of Japan-based Daiki Aluminium Industry Co. Ltd. explained how the company is currently investing in secondary aluminium alloys production in nations including China, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines.
Montani said that if “scrap is banned as an import in China,” the company’s plants there are “unlikely to survive” without making a shift to using scrap generated within China. This can be a positive development for the domestic scrap recyclers.
Responses
