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

Tags
Plastics Recycling

New app designed to facilitate plastics recyclables trading

According to Scrapo, Inc., a Silicon Valley startup, one of the most important problems that surrounds the world environment today is the amount of plastic waste that ends up in the landfill. More than 90% of the plastic products are not recycled and almost 75% of them find their way in the landfills. This has resulted into more than 6 billion tons of plastics having been dumped in the landfills so far and the numbers are increasing alarmingly every year. And it takes more than 500 years for most of these plastic materials to decompose completely. One way of tackling this situation is by reducing the production of plastic materials by reducing the consumption itself. However, because plastic products have become an indispensable part of our daily lives, it's not so easy to get rid of them. The other way is by ensuring that plastic scraps are reused and recycled. 

Read More

Tags
Plastics Recycling

Proposed Specifications for Poly Vinyl Chloride(PVC) Plastic Recyclables approved

Proposed Specifications for Poly Vinyl Chloride(PVC) Plastic Recyclables approved

(Washington, DC) - The Institute of Scrap Recycling Industries (ISRI) Board of Directors approved new specifications for Rigid PolyVinyl Chloride (PVC) Plastic Recyclables at its Fall Meeting on November 8. The new PVC Specifications are intended to encompass more of the plastics recyclables that are actively trading in the scrap plastics marketplace.

Read More

Importance of Quality focus of MRF Council Forum at ISRI meeting

Importance of Quality focus of MRF Council Forum at ISRI meeting

The Institute of Scrap Recycling Industries' (ISRI) MRF Council held a forum in early November on the potential recyclability of several consumer products packaging items. With more than 60 people participating, including recyclers of plastics, paper and, metals; private, for-profit MRF operators representing more than 200 material recovery and recycling facilities across the country; municipal MRF operators; recycled material end-users, including paper mills and plastics reformulators; brokers, and trade associations, the meeting brought together a large cross section of the industry with different vantage points.

Read More

Tags
Metals Recycling
Solid Waste

​Application-Specific Design for New range of Cat Material Handlers

The new range of Cat® wheel material handlers (MH3022, MH3024, MH3026) maintains the Caterpillar purpose-built philosophy for these machines, while reflecting engineering refinements that tailor them more precisely to specific industrial applications. Further improvements for these 2018 models include features that support rapid return-on-investment and enhance overall performance, versatility, and safety.  

Read More

Tags
Electronics Recycling

Study finds lead batteries to be most recycled consumer product in the U.S.

Study finds lead batteries to be most recycled consumer product in the U.S.

CHICAGO — A new study has found that lead batteries have a recycling rate of 99.3 percent, making them the number one recycled consumer product in the U.S. The near-perfect rate of recycling is attributed to industry investment in a state-of-the-art closed-loop collection and recycling system that keeps 1.7 million tons of batteries out of landfills annually.

Read More

Tags
Plastics Recycling
Paper Recycling
Metals Recycling
Solid Waste

BHS Mixed Waste system makes Bee'ah MRF largest and most advanced in region

Sharjah, UAE - Sharjah-based environmental management company Bee'ah is processing municipal solid waste (MSW) with the company's recently renovated material recovery facility (MRF). The 75 tonne-per-hour (tph) system is Bee'ah's premier MRF and features the latest in recovery technology from Eugene, Oregon-based Bulk Handling Systems (BHS) and its subsidiaries Nihot and National Recovery Technologies (NRT).

Read More

Tags
Electronics Recycling
Metals Recycling
Paper Recycling
Plastics Recycling
ELV Recycling

​America Recycles Day Celebrates Recycling Industry's Innumerable Economic and Environmental Benefits

​America Recycles Day Celebrates Recycling Industry's Innumerable Economic and Environmental Benefits

 (Washington, DC) - The Institute of Scrap Recycling Industries (ISRI), the Voice of the Recycling Industry, celebrates America Recycles Day November 15th, by applauding all individuals who make a strong effort to recycle as part of daily life, and encouraging all to learn more about recycling and the industry. America Recycles Day, a national initiative of Keep America Beautiful, takes place yearly on November 15 in an effort to promote and celebrate recycling in the U.S. 

Read More

Tags
Electronics Recycling
Fleets & Technology
Glass Recycling
Metals Recycling
Paper Recycling
Plastics Recycling
Tire Recycling
ELV Recycling

Registration Open for ISRI’s 2018 Convention and Exposition

Registration Open for ISRI’s  2018 Convention and Exposition

(Washington, DC)- Registration is open for the Institute of Scrap Recycling Industries' (ISRI) Annual Convention and Exposition. ISRI2018, the world's largest annual gathering of scrap recycling professionals, will be held April 14-19, at the Mandalay Bay Resort and Casino in Las Vegas. ISRI2018 is set to provide scrap recyclers from around the world with the educational and networking opportunities, product showcases, and industry news needed to maximize their time, dollars, and return on investment. 

Read More

Tags
Industry News
Solid Waste

Celebrating America Recycles Day with "Smart"er recycling: encouraging the donation and recycling of old textiles

Celebrating America Recycles Day with

For this year's 20th National America Recycles Day on November 15, SMART is reminding North Americans not to forget about the importance of reusing and recycling textiles. According to the Secondary Materials and Recycled Textiles Association (SMART), a global organization of companies involved in the reuse and recycling of textiles and related secondary materials, almost any textile can be reused and recycled: old clothing, bath towels, bed sheets, stuffed animals, curtains, purses and even bras! 

Read More

Tags
Fleets & Technology

​Flintec launches family of legal for trade, dynamic, load cells for use in on-board vehicle weighing applications

​Flintec launches family of legal for trade, dynamic, load cells for use in on-board vehicle weighing applications

Cardiff, UK -- Complementing the already established PC2H and PC3H, Flintec has announced the launch of three new dynamic load cells, designed for use in vehicle and machine mounted lifting hoists in a range of applications, including waste management and agriculture. According to Flintec, the PC5H, PC6H and PC7H have been created to help installers fit load cells to new or existing applications where space is a limiting factor. 

Read More

Tags
Composting

Maple Reinders' Calgary Compost Facility Wins Award for Project Infrastructure

Maple Reinders' Calgary Compost Facility Wins Award for Project Infrastructure

Maple Reinders is the proud recipient of a Canadian Council for Public-Private Partnerships (CCPPP) National Award for Innovation & Excellence. The City of Calgary Compost Facility, delivered by Chinook Resource Management Group, a special purpose company of which Maple Reinders PPP Ltd. is a partner, won the Silver Award for Infrastructure. Awards were announced at the annual CCPPP National Conference on November 6, 2017 in Toronto, Ontario. 

Read More