Tags
Metals Recycling

China Concerns Weigh on Nonferrous Scrap Market Sentiment

There remain more questions than answers for North American scrap industry when it comes to impending import restrictions

As the world's largest importer of nonferrous metal scrap, China continues to be a critical market driver for scrap metal recyclers. In 2016, mainland China accounted for 70 percent of all U.S. copper and copper alloy scrap exports and more than 50 percent of U.S. aluminum scrap exports, according to Census Bureau data. Given China's dominant share of global nonferrous metal consumption and the potential impacts of looming Chinese scrap import restrictions, it should come as no surprise that China was a recurring topic of conversation at ISRI's 2017 Commodities Roundtable Forum in September. 

Concerns about Chinese scrap demand, and more broadly, economic growth, are nothing new of course.  Beijing continues to grapple with the need to stimulate economic growth while simultaneously attempting to bolster environmental protections, rein in excessive debt levels, and transition to a consumption-based economy. Among its many other priorities, China is also determined to develop its domestic scrap recycling industry, with outsized implications for scrap recyclers around the globe.

News that China is considering import restrictions on scrap plastics, paper and other recycled commodities, earlier this year, came at a time when scrap markets were in the early stages of recovery. As scrap industry members can attest, the downward trajectory of commodity prices from 2011 into 2016, coupled with logistical bottlenecks, slowing overseas demand, among other challenges, have contributed to some of the most difficult scrap market conditions in a generation, resulting in further industry consolidation. But market conditions have actually started to improve in 2017. 

The Trump administration's agenda to cut taxes, increase infrastructure spending, reduce regulatory burdens and revamp healthcare policy was music to the ears of many in the business community, scrap recyclers included. At the same time, Chinese stimulus measures in the first half of 2017 were widely viewed as supportive for commodity prices, and investors took note. According to a Wall Street Journal report, commodity trading advisors (CTAs) attracted more than $7 billion in new investor cash in the first quarter of 2017, bringing total CTA assets under management to $256 billion. Prices for primary commodity prices reacted accordingly. As of early September, copper prices at the London Metal Exchange were up more than 25 percent for the year-to-date, and most of the other major nonferrous metals including aluminum, zinc and nickel were registering double-digit year-to-date gains as well.

A weaker dollar also helped to underpin commodity prices. Persistently low inflation levels in the United States gave the Federal Reserve more time to raise target interest rates and reduce its balance sheet which, along with better than expected economic news from Europe, weighed on the value of the dollar. All other things being equal, a weaker dollar makes dollar-denominated commodities more affordable for buyers around the world, generating greater demand. Higher primary commodity prices and a weaker dollar also make U.S. scrap exports more competitive. 

For the first seven months of 2017, Census Bureau data shows that U.S. exports of copper and copper alloy scrap to China increased 13.4 percent, to more than 343,000 metric tons, and were up nearly 12 percent overall. 

But the sharp increase in primary commodity prices, including refined copper, raised questions as to whether the gains were driven more by speculative investment than market fundamentals. As evidence of the former, domestic scrap recyclers saw copper scrap spreads widen sharply as refined copper prices advanced - an indicator that copper scrap demand was not keeping pace with rising copper cathode prices. So while commodity price levels generally were improving, scrap recyclers weren't necessarily capturing a significant portion of those gains.

It was at this point that China's plans for scrap import restrictions - apparently including electrical appliance scrap, electric wires and cables, and electric motors - along with tighter contamination limits, began to take a toll on industry sentiment. 

At the time of this writing, there are unfortunately more questions than answers. It remains to be seen what commodities will be restricted and when those restrictions will eventually take effect. There are also questions surrounding Beijing's motivation for enacting new scrap import restrictions: is it being driven purely by environmental concerns, by the desire to develop its domestic recycling infrastructure, by market considerations, or by some combination of all of these and other factors? 

What is clear at this point is that ISRI has been leading the charge on behalf of scrap recyclers in North America with respect to Chinese scrap imports. In addition to numerous meetings with Chinese and U.S. officials, industry participants and scrap consumers, ISRI has submitted comments to the World Trade Organization and China's Ministry of Environmental Protection, sharing our concerns regarding protectionist measures, asking for clarity on the scope and timing of implementation, and offering to support the Chinese government as they seek to improve China's environmental quality and develop their domestic recycling sector. 

While the potential impacts of new Chinese scrap import restrictions remains to be seen, it is important for policy makers and other stakeholders to keep in mind that recycling is part of the solution to environmental problems, that scrap is not waste, and that the full range of economic and environmental benefits associated with recycling can only be realized through the free and fair global trade of commodity-grade recyclables.

Joe Pickard is Chief Economist for the Institute of Scrap Recycling Industries (ISRI).

This article was originally published in Recycling Product News October 2017,  Volume 25, Number 7.

Company Info

  • Institute of Scrap Recycling Industries (ISRI)

    1615 L Street, NW, Suite 600
    Washington , DC
    US , 20036

    The Institute of Scrap Recycling Industries, Inc. (ISRI) is the Voice of the Recycling Industry. ISRI represents approximately 1,300 companies in 21 chapters in the U.S. and 34 countries worldwide that process, broker and consume scrap commodities, including metals, paper, plastics, glass, rubber, electronics, and textiles. With headquarters in Washington, DC, ISRI provides education, advocacy, safety and compliance training, and promotes public awareness of the vital role recycling plays in the U.S. economy, global trade, the environment, and sustainable development. Generating more than $105 billion annually in U.S. economic activity, the scrap recycling industry provides nearly half a million Americans with good jobs.

    Read more

Latest News

Geotab Surpasses One Million Subscribers

Geotab Surpasses One Million Subscribers

Geotab has announced it has surpassed one million subscribers, positioning the company as one of the fastest growing providers of telematics globally. Launching their subscriber-based solution in 2006, Geotab has seen an average of 116% annual subscriber growth over the last 10 years. "Early in 2017, we announced our company team goal to be the first fleet telematics company to achieve one million connected vehicles built on a single, open platform," says Neil Cawse, CEO, Geotab. "Together we have grown to support over 21,000 businesses, 300,000 users, and 1,000,000 vehicles around the world by focusing on sustainability, scalability, reliability and security."

Read More

Tags
C&D Recycling

How Government policy can help C&D recyclers

How Government policy  can help C&D recyclers

Several actions can be taken by governments at all levels to support the recycling of construction & demolition industry waste products. One of the most common tactics is landfill disposal bans on recyclable materials in the waste stream. Two examples are the ban on drywall disposal in British Columbia, and the requirement in King County, Washington that all C&D loads with more than 20 percent recyclable material be rejected at the transfer station and sent to a Material Recovery Facility.

Read More

Tags
Industry News
Plastics Recycling

Coast Waste Management Association meeting focused on plastics recycling

Talking plastics at the CWMA February 2018 meeting and conference in Nanaimo, B.C., from left: Rustam Punja, Geocycle, Craig Foster, CPIA; Ian Kidd, CasCell Trading ; Pat McLaughlin, King County Solid Waste Division; and Will Burrows, executive director of the Coast Waste Management Association.

On February 16th, the Victoria, B.C.-based Coast Waste Management Association hosted a meeting and seminar called Plastics Management - economic, market and regulatory trends affecting plastics.  The conference, held in Nanaimo, B.C., brought together close to 80 delegates from Vancouver Island and around the province, and as far away as the Yukon and Washington State, including an expert industry panel. The goal of the meeting was to discuss present market conditions and what can be done to adapt, in light of China's recently established policy on regulations surrounding import of recycled materials. Attendees were briefed on work that is being done to address the issue, alternative markets for plastics and what we might expect to see going forward. 

Read More

Tags
Fleets & Technology

Galbreath launches versatile TH-14 Trail Hoist

Galbreath launches versatile TH-14 Trail Hoist

Galbreath, a leading manufacturer of hoists, container handlers and trailers, recently launched its TH-14 trail hoist. Built to last and stand up to the toughest jobs, the TH-14 offers the perfect solution for small independent waste haulers, roofers, contractors, landscapers and municipalities looking for a versatile piece of equipment that can be used to perform a wide range of hauling applications.

Read More

Tags
Plastics Recycling

BHS' ​Max-AI AQC selected for APR Plastics Recycling Showcase

The Max-AI AQC (Autonomous Quality Control) has been selected for recognition as a part of the Association of Plastic Recyclers' (APR) 2018 Plastics Recycling Showcase. The Max-AI AQC was launched in 2017 by Eugene, Oregon-based Bulk Handling Systems (BHS) and Nashville, Tennessee-based National Recovery Technologies (NRT). The selection was announced during a recent APR Technical Forum, held February 12, in conjunction with the Plastics Recycling Conference in Nashville. NRT President Matthias Erdmannsdoerfer presented at the forum, and earlier in the day conference attendees visited NRT's headquarters to see live demonstrations of the Max-AI AQC.

Read More

Tags
Metals Recycling

Tri-State Iron & Metal achieves higher yield on ferrous shred with Eriez' ballistic separator

The Eriez Shred1 ballistic separator is designed to efficiently separate iron-rich ferrous from the mixed metals and waste material in the post-drum magnet flow, produces a premium low-copper shred.

Scrap processors are continuously seeking new and innovative ways to obtain a premium ferrous shred which yields a higher value per ton and meets the most stringent steel mill standards. 

Read More

Tags
Plastics Recycling

End-of-Life Vehicles Project paves way for recycling plastics from automobiles

End-of-Life Vehicles Project paves way for recycling plastics from automobiles

A promising future exists for successfully recycling plastics recovered from automobiles, according to the Plastics Industry Association (PLASTICS), which released results from Phase I of its End-of-Life Vehicle (ELV) Recycling Demonstration Project today. The results demonstrate both the technical and economic feasibility of collecting and reprocessing certain plastic auto parts so they can either be put back to use in automotive applications or reborn as new products. Work continues through phases two and three of the project.

Read More

Tags
Industry News
Metals Recycling
Paper Recycling
Plastics Recycling

​ISRI launches ISRI Connect Mobile App for members and industry stakeholders

​ISRI launches ISRI Connect Mobile App for members and industry stakeholders

In an industry based on connections, being able to network and access key information wherever you are, is essential to a successful business. The new mobile app launched by the Institute of Scrap Recycling Industries (ISRI), ISRI Connect, is built around this concept and the importance of networking, news and information, and industry resources.

Read More

Kinshofer NOX-Tiltrotators have cylinderless design and only two grease points

According to Kinshofer, the NOX-Tiltrotator's cylinderless design provides a narrower tool than other manufacturers' tiltrotators.

Kinshofer's NOX-Tiltrotators have a universal joint that offers 360-degree continuous rotation and tilting angles of up to 2 by 55 degrees, which the company says is the widest in the industry. The Tiltrotator features an elliptical piston, rather than a cylinder, for a streamlined design and high-power performance in a variety of tight areas and applications, such as road construction, general construction and city snow removal.

Read More

Tags
Metals Recycling
Paper Recycling
Plastics Recycling

Despite China’s ban, overall U.S. scrap exports remain strong in 2017

Despite China’s ban, overall U.S. scrap exports remain strong in 2017

News that China would ban certain scrap imports shook the recycling industry last summer, yet U.S. global scrap exports increased overall in 2017 according to a new analysis from the Institute of Scrap Recycling Industries (ISRI). As improved demand for ferrous and nonferrous metal scrap more than offset weaker demand for non-metallic scrap, total U.S. scrap exports advanced in 2017 in both value and volume terms. 

Read More

Tags
Metals Recycling

Sennebogen provides right combination for CRC Scrap Metal Recycling

Loading their 750-ton logger/baler/shear is a primary responsibility of CRC's new SENNEBOGEN 825 scrap handler.

When Blake Stanley graduated from college, he immediately joined the new metals recycling company that his grandfather, Ronnie Strange, had started up just months before. Strange launched the business with the help of two other partners, and Blake soon learned that who you know is often as important as what you know, to get a new enterprise off the ground.

Read More

Tags
Industry News

Lindner Recyclingtech GmbH invests in North American expansion

Lindner Recyclingtech GmbH invests in North American expansion

Lindner Recyclingtech GmbH, a European leader in industrial stationary and mobile shredding equipment, has opened its new North American headquarters located in Statesville, North Carolina.  In late 2017 the company completed the purchase and renovation of a 25,000 square foot facility on a 4-acre campus along with renaming its fully owned US subsidiary to Lindner Recyclingtech America.  The new facility is focused on expansion of the Lindner parts inventory and service support team, along with a fully operational customer demonstration and test lab facility.

Read More