Why it Matters to Recycling
A strong and robust recycling industry is critical to a healthy manufacturing sector. The U.S. scrap industry is a significant exporter of high-quality scrap commodities to industrial consumers worldwide. The steady growth in China’s industrial economy led to an ever-increasing demand for scrap supplied from the United States and around the world. As a result of China’s industrial production, plastic and paper scrap consumption had increased 50% and 70%, respectively, in the last decade; scrap metal consumption has also increased. By 2017, 31% percent of U.S. scrap commodity exports – worth $5.6 billion – were sent to China.
As part of China’s environmental protection drive, the government is implementing a range of trade-restrictive measures:
- A ban on scrap plastics from household collections and unsorted, mixed paper from all sources beginning in 2018;
- A ban on all plastics, small electric motors and insulated wire beginning in 2019;
- New import permitting requirements for certain ferrous and nonferrous metal scrap beginning July 2019;
- A ban on stainless steel and other metallic scrap beginning in 2020.
In addition, the Chinese government implemented stricter technical standards for scrap imports beginning in March 2018, allowing only shipments that meet very strict thresholds for allowable contaminants to be imported. Unfortunately, existing technology makes meeting those targets a challenge for most scrap commodities.
Through these policies and additional measures, such as through its import licensing and quota system, the Chinese government is curtailing the free and fair trade of scrap commodities into China, which has had a widespread impact on global scrap commodities markets.