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China’s Scrap Industry under Scrutiny

We are working hard to keep you as updated as possible on developments in China. Information is coming in fits and spurts.

 Earlier this month, we learned that the Chinese government is undergoing a nationwide inspection of Chinese scrap processing facilities. It is our understanding that the focus is mainly on processors of domestically generated material and not on importers, and that in just one week, more than 70 percent of the companies inspected were found in violation of air and water pollution rules, and had incomplete operational documents and/or equipment misuse. The vast majority of these are plastic scrap processors, though a number of nonferrous metals handlers were also found to be out of compliance.

Although domestically focused, anxiety continues to penetrate the market as these activities also create uncertainties for Chinese importers. We are told that only until these inspections are complete will the Chinese government consider restarting reviews of import permits. Without these permits, members are reporting to us that sales are on hold, materials are stuck at Chinese ports or their own yards, and in some cases containers fail inspections without explanation. 

As we monitor this situation, we are also working to build support among key government and industry supporters. In Washington, we have met with key officials in the Trump Administration. The U.S. Departments of Commerce and Treasury co-lead with their Chinese counterparts the U.S.-China Comprehensive Economic Dialogue (CED), the primary venue for the two governments to engage in dialogue on priority issues and irritants in the bilateral relationship. Additionally, we have met with key Congressional leadership responsible for trade as they, too, have opportunities to either engage directly with the Chinese government or encourage the Administration to do so.

ISRI continues to gather information and coordinate outreach with key industry players in China, the United States, Europe, and Australia, and we have briefed officials in the European Commission about these events. Although much of the work has been with ISRI at the helm, we believe the opportunity of success only grows when there are more voices in the chorus. We appreciate the information already gathered from members and the work that some of you have done directly with policymakers – we certainly hope to hear from many more of you. Until then, we will keep sending updates on what is occurring in China to elaborate on this and answer your questions directly.

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