Chinese directive could massively change scrap flows

The central government of the People’s Republic of China has reviewed and approved a prohibition on imports of several types of yet unidentified scrap materials. The ban is part of China’s “reformed solid waste import management plan.”

According to the Brussels-based Bureau of International Recycling (BIR), the plan was approved Wednesday, April 18, 2017, when China’s President Xi Jinping held the 34th meeting of the Central Leading Group for Deepening Overall Reform of the People’s Republic of China.

At the Institute of Scrap Recycling Industries (ISRI) ISRI2017 convention in late April in New Orleans, recyclers from across the spectrum of materials expressed concerns about which grades of scrap might be on the list.

Metals recyclers identified mixed shredded metals, radiators and unprocessed wire and cable as grades that could be affected. Paper recyclers have mentioned the mixed paper grade as a likely target, adding that they hope old corrugated containers (OCC) will remain acceptable.

Plastic scrap shipments already are being turned away or charged with stiff tariffs at ports in China as part of the National Sword customs clearance program.

The business models of many manufacturing firms in China, including containerboard makers, copper refiners and secondary aluminum producers, and of recyclers around the world hinge on the trade of scrap from other nations into China. According to a recently compiled ISRI database, more than half of the copper scrap traded across international boundaries in 2015 was imported by China.

Industry trade groups as well as government commerce departments around the world may react to oppose the Chinese plan in its current format. China is striving to attain market economy status as a World Trade Organization (WTO) member nation, and the scrap ban may be seen as a blatant violation of WTO policies.

According to the BIR, the Chinese central government directive spells out “that in order to maintain national ecological and environmental safety as well as people’s health in general and improve the import management system of solid waste, different subsectors should develop and implement a ban on solid waste imports through the adjustment of the import directory by categories in order to substantially reduce imports by type and volume through legal, economic and administrative means.”

An additional goal of the directive, according to the BIR, is to “strengthen the regulation on solid waste management for the development of the Chinese circular economy.”

The BIR says China’s Ministry of Environmental Protection has been tasked with formulating the “new waste import catalogues” with a wider list of materials.

Study shows economic impact of US scrap recycling industry

According to a new “Economic Impact Study” released by the Institute of Scrap Recycling Industries (ISRI), Washington, the U.S. recycling industry accounts for nearly half a million jobs and generates more than $116 billion annually in economic activity.

John Dunham and Associates, an independent consulting firm, performed the study to explore the size and scope of the U.S. scrap industry and to measure its contributions to the economy in terms of employment, tax generation and overall economic benefit.

“The recycling industry has had its ups and downs over the last couple of years with the commodity markets, but this study shows its resiliency and a positive momentum for the future,” says ISRI President Robin Wiener. “There is still a lot of unpredictability in the markets and uncertainty about the impact public policy decisions may have on trade. However, this study proves the recycling industry is an economic force and must have a strong voice in conversations related to international trade and fiscal policies in Washington,” she continues.

According to the study, the recycling industry is responsible for providing more than 534,500 direct and indirect jobs in the United States. This includes more than 155,630 direct jobs that pay an average of $76,515 in wages and benefits. Direct jobs include those in facilities that process scrap materials into new, usable commodities. Indirect jobs come from those companies that supply machinery, equipment and services to processors and the wages and taxes paid by the scrap recyclers to their workers and suppliers.

In addition, the industry generates more than $13.2 billion in federal, state and local tax revenue annually.

The study also reveals that the scrap recycling industry provides for 0.63 percent of the nation’s total economic activity.

The study’s results, along with state-by-state and congressional district breakdowns, can be found on ISRI’s website at www.isri.org/economy.