Chinese Scrap Ban Woes Could Cripple US Recycling Exports

SEATTLE (Scrap Monster):  The Institute of Scrap Recycling Industries (ISRI) has released a public letter on the proposed regulations on scrap imports to China. Stating that the new standards would badly impact the entire recycling industry, it warned that implementation of the same could even bring recycling exports to a standstill. The letter, the third in a row following the Chinese ban announcement, is addressed to the Department of Soil Environment Management and the Ministry of Environmental Protection.

The ISRI letter is in response to the July 18 notification by Chinese authorities to revise general rules and identification standards on imported scrap as part of its efforts to step up environmental policies. The notification proposes stricter regulations on percentage of allowed impurities and new weight requirements on loads of scrap materials and electronic devices.

The draft document released by the China Certification & Inspection Group (CCIG) had stated that the Chinese administration plans to reduce the allowed contamination level on imports of baled scrap paper from current level of 1.5% to 0.3% by the end of the current year. Further, the waste threshold on all commodities imported into the country would be lowered to 0.3%. The drastic reduction from the existing 2% impurity tolerance is feared to prohibit exports of various scrap commodities, ISRI noted.

The Chinese authorities propose to raise the level of minimum recyclable content in scrap metal and scrap electrical appliance shipments into the country. According to CCIG notification, the shipments of above mentioned scrap materials must contain a minimum recyclable content of 80% in order to qualify for imports at Chinese ports. The ISRI pointed out that the US recycling industry uses 50% recycled content as the cut-off for scrap metal. It requested China to stick to the uniform global standard of 50%. Raising the threshold would have devastating effect on the balance of global trade, said ISRI president Robin Wiener.

The new regulations are feared to impact shipments of Category 7 scrap which includes aluminum and copper. The impact on copper scrap trade is projected to be the worst as China happens to be the world’s largest importer of copper scrap. The proposed regulations are more likely to impact copper scrap trade, market participants noted. Incidentally, Customs data suggests that the copper scrap imports by China during H1 2017 are up by almost 19% over the previous year.