China Expands Restrictions on Scrap Imports
The Chinese government announced mid-April it would impose new restrictions on imported recyclable materials over the next two years. By the end of this year, it will prohibit steel slag, postindustrial plastics, compressed auto pieces, small electric motors and insulated wires, and vessels. By the end of 2019, it will prohibit stainless steel scrap, nonferrous scrap (excluding aluminum and copper), and wood pellets. The prohibitions will affect more than 676,000 mt of U.S. scrap exports to China in the first year, worth about $278 million, and an additional 85,000 mt of scrap worth more than $117 million in the second year, according to ISRI President Robin Wiener.
China also imposed a one-month suspension, from May 4 to June 4, on CCIC North America’s preshipment inspection operations, meaning it cannot issue certificates of inspection for scrap commodities bound for China. CCICNA is the only agency approved in the United States to perform such inspections to date, thus the suspension effectively stops the export of scrap to China in that period. The move prompted ISRI to advise member companies with shipments already en route to China to consider diverting the shipments to other countries. Visit isri.org/advocacy-compliance/china.
India Lifts Preshipment Inspection Requirements
India’s Directorate General of Foreign Trade has exempted the United States—along with Canada, the United Kingdom, New Zealand, Australia, and the European Union—from preshipment inspection requirements for metal scrap cargoes shipped to Chennai, Tuticorin, Kandla, Jawaharlal Nehru Port Trust, Mumbai, and Krishnapatnam. Exporters must provide a certificate indicating the shipment does not contain radioactive materials or explosives. Indian authorities will screen shipments at the port of arrival.
Indonesia, Vietnam Change Scrap Import Regulations
On April 1, the government of Indonesia implemented a 100-percent preshipment inspection policy for recovered paper imports, reports Adina Renee Adler, ISRI’s senior director of government relations and international affairs. Inspection company Cotecna (Geneva) outlined the new procedures, which differ depending on whether the materials come from a single yard or multiple yards. Shippers will have to provide total weight and container details to the inspection office within four days, adding to exporters’ time, cost, and storage burdens, Adler warns, adding that Indonesia’s actions confirm ISRI’s concern that China’s import restrictions would lead other Southeast Asian countries to impose similar restrictions or requirements.
In Vietnam, Tan Cang–Cai Mep Interna-tional Terminal announced several restrictions on all recovered paper and plastic scrap beginning in June. These cargoes now must have valid import permits and a letter indicating the date a domestic consumer will pick up the container, according to the notice. Through Oct. 15, the port authority will stop accepting containers of plastic scrap but continue to clear containers of recovered paper if they comply with the permit and letter requirement. The port authority will review the situation Oct. 15 and issue further guidance as needed. This terminal’s restrictions are likely the result of a build-up of containers causing delays at the port, according to ISRI. Visit isri.org.
U.S. Scrap Export Data Show Impact of China Changes
The United States shipped 38 percent less scrap to mainland China in the first half of 2018 than it did in the same period of 2017, according to U.S. Census Bureau and U.S. International Trade Commission data. This 3 million mt decrease—from 7.84 million mt of scrap in January–June 2017 to 4.83 million mt in January–June 2018—amounts to a loss of more than $670 million in the first six months of 2018, says ISRI Chief Economist Joe Pickard. In addition to facing China’s trade policy changes affecting its worldwide imports of scrap, U.S. exporters face 25-percent tariffs on exports of aluminum scrap China imposed in April. Effective Aug. 23, China imposed another 25-percent tariff on $16 billion worth of U.S. goods, including all scrap commodities, in retaliation for equivalent U.S. tariffs on Chinese goods.
Hit hardest so far in 2018 have been U.S. plastic scrap exports to China, which fell 92 percent, from 379,342 mt in the first half of 2017 to 30,229 mt in the first half of 2018, according to the trade data. U.S. copper scrap and recovered paper and fiber exports to China both fell 38 percent year on year, while aluminum scrap fell 20 percent and ferrous scrap fell 5 percent, Pickard reports. Contact him at firstname.lastname@example.org or visit www.isri.org/china.
U.S. Plastic Scrap Exports Face Potential New Barrier
The Norwegian government in June proposed to amend the Basel Convention’s Annexes II and IX to add scrap plastic to Annex II’s category of materials requiring “special consideration.” Norway proposed the amendment out of concern for growing volumes of plastic litter in oceans and seas. If the parties to the Basel Convention accept the amendment, it would mean the United States, which has not ratified the agreement, could not export scrap plastic to countries that have ratified it unless they are in the Organization for Economic Cooperation and Development or have bilateral or multilateral agreements with the United States to accept such exports. Visit www.basel.int/TheConvention/Communications/tabid/1596/Default.aspx.
Research Predicts Impacts of China’s Plastic Scrap Import Ban
If current trends continue, 111 million mt of plastic scrap worldwide will need to find new markets between the end of 2017, when China imposed new scrap import restrictions, and 2030, researchers at the University of Georgia’s College of Engineering estimate. The United States’ share of that total is 37 million mt.
The researchers calculated historic trends in plastic production and recycling, noting that “only 9 percent of all plastic ever produced has been recycled.” They call for “bold new ideas and system-wide changes” to address this need, including more robust domestic recycling programs and rethinking both the design and use of plastic products. The researchers published the study in the June 2018 issue of the journal Science Advances. Visit advances.sciencemag.org or uga.edu.
China’s Boxboard Producers Face Fiber Deficit
The restrictions China imposed this year on scrap fiber imports have created at least a 6 million mt fiber deficit for China’s boxboard industry, according to RISI (Boston). The shortfall also will sharply reduce Chinese boxboard exports, RISI says, including exports of products coming back into the U.S. market. As China’s market share of boxboard exports falls, low-cost producers in Brazil and Chile will be in a position to strongly increase exports, RISI predicts. U.S. recovered fiber that doesn’t go to China could remain available for U.S. producers, lowering their production costs, it adds. Visit www.risi.com/worldboxboard.
Malaysia Imposes Levy on Plastic Scrap Imports
After lifting a freeze on approved permits for importing plastic scrap, the government of Malaysia announced a new levy of RM15 ($3.62) per metric ton of imported plastic scrap, news media reported. In addition, companies applying for approved permits must provide the names of companies importing and exporting the plastic scrap so the government can check their legitimacy, adhere to capacity and storage requirements, attain the Department of Environment’s approval, and submit their facilities to housekeeping checks from the National Solid Waste Management Department. The actions are meant to address air pollution from illegal plastic scrap processing facilities, as well as the problem of approved permit holders renting their licenses to others, according to news reports. The Housing and Local Government Ministry has announced plans to consolidate plastic processing facilities in heavy industrial zones. Advocacy group Consumers Association of Penang argues that the levy doesn’t go far enough, and it urges the government to impose a total ban on the import of what it calls plastic “waste.” Visit consumer.org.my.
India’s Ministry of Environment, Forests & Climate Change plans to ban plastic “waste” and scrap imports, including those previously allowed to enter the country through special economic zones and export-oriented units. The United States exported more than 120,000 mt of plastic scrap to India, worth more than $46 million, in the first 11 months of 2018, according to Adina Renee Adler, ISRI’s assistant vice president of international affairs. Several news outlets have reported that India will delay the implementation of the ban, originally announced as March 1, by six months for special economic zones and export-oriented units, with the new implementation date Aug. 31, but the Indian government had not confirmed that by press time.
In other news from India, the Directorate General of Foreign Trade approved a seventh port of entry for metal scrap. Mundra Port in the state of Gujarat joins the ports of Chennai, Tuticorin, Kandla, Jawaharlal Nehru Port Trust, Mumbai, and Krishnapatnam as entries for shipments without a preshipment inspection certificate arriving from the United States, United Kingdom, Canada, Australia, New Zealand, and the European Union. India is installing and testing radiation detection equipment in another eight ports that are in the process of attaining PSIC exemptions, Adler says. Contact her at email@example.com or 202/662-8514.