The Chinese Government continues to take an active role in regulating scrap imports ostensibly for environmental protection purposes, but announcements just within the last few weeks have indicated that Chinese demand for manufacturing inputs – including from recycling – remains strong.
Last year, the Chinese Government indicated its intent to revise the national solid waste management law, which included a proposed provision to ban all solid waste imports by the end of 2020. ISRI submitted comments to the draft specifically requesting the government to clearly distinguish scrap from waste.
In a second revision of the law just issued, the Chinese government stepped back the intent to ban all imports. In Article 25, the new proposal is unofficially translated as "The State shall gradually and basically realize zero import of solid wastes..." This appears to be a concession that China still needs these valuable inputs for manufacturing. However, Article 24 clearly states it is "forbidden to dump, pile up or treat any solid wastes from abroad within the territory of China." The continued use of "solid waste" to refer to both trash and scrap, unfortunately, remains an obstacle to providing suppliers with clear guidance on China's import policy for scrap.
The Chinese Government also issued a fresh round of import quotas for copper, aluminum and ferrous scrap and for recovered paper. Although most analysts focus on the balance between these commodities in terms of how many quotas were issued, we note that the allowed quantities for the unknown term (one month or one quarter, we have not been able to confirm) will result in just 15-30% of the volumes that were imported into China in 2018.
In short, although the draft revisions to the solid waste law indicate a continued need for material, the government will use its import license and quota system to de facto shrink imports.
The Chinese Government is also developing a set of standards for raw materials imports derived from recycling. ISRI has obtained drafts for recycled copper and recycled brass raw materials imports. A rough, unofficial translation of the copper standards can be obtained here, and we continue to await a translation for the brass standards. ISRI takes note that these standards require that the imported consignment must be 97-99% copper content and 90-99% recoverable. We also note a strong emphasis on contracts for carrying out the transaction and resolving disputes, although it is unclear how the Government's role in inspections would interfere in those contracts. ISRI is asking for member input on these standards, which can be directed to Adina Renee Adler.
Although these developments provide some space for continued trade with China, ISRI continues to believe that the use of quotas and issuance of licenses (including the removal of previous grandfathering of non-RIOS and non-ISO export license holders for renewal) and the government's policy declarations mean that China is moving towards a protected and self-sufficient economy with little to no use for imported scrap materials. This policy is contrary to the material needs of the consumers and manufacturers e.g., smelters and mills) but is being pursued nonetheless by the Chinese Government.