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BIR Roundtables: Growing Global Market Opportunities Despite Trade Protectionism

ISRI Chairman Brian Shine, Chair-elect Gary Champlin and I, along with members of the ISRI staff, attended last week’s Bureau of International Recycling (BIR) annual round tables in London.

IMG_1235_200The commodity sessions combined market reports with policy developments impacting the industry, and overall, struck an optimist tone that the industry is, for the most part, weathering trade protectionism in the form of China’s import restrictions, U.S. tariff policy, Brexit, and the Basel Convention plastics proposal.

The ferrous division anticipates steel manufacturing worldwide to remain strong but had a heavy focus on the impact the U.S. 232 tariffs on imported steel has had on global scrap markets. Of note, ferrous division statistics advisor Rolf Willeke reported that Chinese ferrous scrap consumption during the first half of 2018 more than doubled year-on-year to 127.6 million metric tons, up from the 62.2 million tons of ferrous scrap consumed in China in the first half of 2017. Former ISRI Chairman George Adams of SA Recycling reported that the U.S steel mill capacity utilization rate improved to around 80 percent, while the capacity utilization rate at electric arc furnaces was up around 90 percent. Despite Section 232 measures, the United States ferrous scrap market still relies on exports, particularly to Turkey, said Fastmarkets metals analyst Lee Allen. Between January 2016 and mid-2018, 17.6 percent of Turkey’s ferrous scrap imports came from the U.S., but it climbed to 20.3 percent by August this year. Indian market experts worried about the United States’ increased tariffs on Turkish steel imports, but a price rebound in August added stability to the markets, said Zain Nathani of the Nathani Group of Companies. Yet the U.S.-China trade war, which has put pressure on most currencies, hurt India’s importers when the rupee lost 10 percent of its value recently, a record low against the U.S. dollar, he said.

The nonferrous division was optimistic that despite China’s regulatory changes, nonferrous scrap was finding its way to other important growth markets in India, Europe, and North America. Although there are opportunities in Southeast Asia, the feeling was cautious as Chinese manufacturers that moved to these regions are having to “rethink” their business strategy in the wake of government backlash on plastics imports. There was moderate concern about U.S. tariff policy, but a suggestion was tabled to reach out to the aviation and auto industries, among others, about how to use their brand power to elevate the importance of recycling.

I also reported to BIR members that ISRI awaits the results of a federal study on crumb rubber safety that could affect the market for use on sports fields especially as many state and local governments have put projects on hold in anticipation of the report’s release, which we hope will come out by next month. Gary Champlin joined me in emphasizing to the industry the importance of promoting science-based analysis in the development of regulations that could effect this critical market segment.  This has become a global issue, with the Secretary General of the European Tyres & Rubber Manufacturers Association (ETRMA) addressing recent studies in Europe and seeking to work cooperatively with ISRI on developing viable markets for scrap tires globally. 
 

The plastics and paper divisions remain concerned about the effects of China’s import regulations but are hopeful about an emergence of opportunities in North America (partly fueled by Chinese investment) and India. The Basel convention proposal on plastics is of great concern to plastics recyclers, and Brian Shine called on BIR to lead the global associations in an effort to work with governments and NGOs to promote recycling as part of the solution to marine debris concerns. It was acknowledged by most that recycling is, more and more, taking place closer to the points of collection.BrineShine_300

At the World Council of Recycling Associations meeting, Shine expressed ISRI’s continued support for World Recycling Day and encouraged the BIR to seek work closely with recycling associations around the world in order to maximize the impact of BIR’s messaging across all regions.

The BIR’s next convention will take place at the end of May in Singapore. Please contact Adina Renee Adler for more information about BIR as an organization and about their conventions.

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