State Council Ponders Total Ban on Scrap Imports, Including All Metal Scrap

SEATTLE (Scrap Monster): The press release issued by China’s State Council on Sunday June 24 states that the country is working towards implementing complete ban on scrap imports, including imports of all metal scrap by the end of 2020. During the two years before 2021, the country targets to cut the imports of solid waste substantially, in accordance with its anti-pollution policy guidelines. The Chinese directive aims to protect its environment by enforcing stricter controls on imports and promoting domestic recycling of materials.

According to exporters, a lot can happen as there are still two years left before the announced date of implementation of the ban. Further, the announcement is not official, they said. Given the fact that even developed countries still buy scrap, it is impossible to believe that China will impose outright ban on scrap imports. The country may allow some scrap to be imported, they noted. However, the announcements that come out of China are not encouraging to exporters of recyclables. Incidentally, the U.S. scrap exporters have already identified the need to garner alternative markets for their scrap.

ALSO READ: Restrictions to Spur Fresh Investments in U.S. Recycling Industry

Market participants also fear that further restrictions on scrap imports by China are likely to badly impact the metal prices. They foresee a dramatic downturn in scrap prices, in the event of any such happening. There are likely chances of margins getting squeezed and scrap sector earnings taking a big hit. The official implementation of the new ban may transform China from a buyer of raw materials to a buyer of semi-finished products. Further, it will boost consumption of domestic waste and scrap, they noted.

China has been gradually tightening controls on solid waste imports. The country had recently announced rigorous inspection procedures at ports. Earlier, it had also raised the contamination limit on waste imports to 0.5%.