China intends to ban certain scrap from being imported, citing environmental concerns.
Recycling industry leaders expect more bans to follow.
The impact of restrictions could be significant for US recyclers because China is the largest receiver of exported scrap commodities.
Scrap organizations are on edge.
On July 18, the Institute of Scrap Recycling Industries stated:
“More than 155,000 direct jobs are supported by the U.S. industry’s export activities, earning an average wage of almost $76,000 and contributing more than $3 billion to federal, state, and local taxes. A ban on imports of scrap commodities into China would be catastrophic to the recycling industry.”
To date, China has told the World Trade Organization that it plans to ban the import of certain scrap materials by the end of 2017, including unsorted mixed paper, most scrap plastics, metal slags, and drosses. Scrap paper accounted for $1.9 billion of the more than $5.6 in scrap commodities that were exported from the United States to China in 2016. Scrap plastics comprised $495 million.
The restrictions that have been announced so far will impact scrap paper more than plastics due to China having already cut back on its import of scrap plastics over the past few years. The exact impact on the US scrap industry is still uncertain but some possibilities or prediction have been made, according to a Waste Dive report on China’s scrap ban surprise.
The US tends to export its scrap because of the lack of technology to optimize sorting and extracting. Without the ability to just send the banned products overseas, companies will have to push for better technology to optimize their extraction levels. Or, companies could choose not to become more efficient. If that were to occur, consumers could be less likely to recycle because prices could drop due to excessive supply of scrap materials that can’t be exported .
In having to adjust and determine where all of the banned scrap will now go, the US may work towards making better use of its scrap. This may be done through using scrap to produce more products or, as mentioned previously, by finding better ways to extract as much of the resource as possible.
Using recycled materials for production of goods is often cheaper than creating the material new. This mindset could align with the Trump Administration and its plans to bring manufacturing jobs back to the US. There already have been efforts to start improving the efficiency of recycling and scrapping through the use of technology. This is accomplished by producing machines and processes that allow for more of a material to be extracted from scrap.
One of the worries about the restrictions that China is initiating is that other scrap may be banned as well. This was confirmed shortly after China released the details on its ban on plastics, mixed paper, and other materials.
China has mentioned that it also plans on banning wire, motors, and some bulk metal scrap in 2018, Reuters reported. One of the wires that will be banned is copper wire. This news sent the price of copper up with an increase of 5% per tonne in some places.
Additional news:
Waste Dive: What comes next after China’s Scrap Ban Surprise?
Reuters: China reviewing copper scrap imports; may call halt in 2018: notice
Institute of Scrap Recycling Industries: ISRI Statement on China’s Intent to Ban Certain Scrap Imports