We Buy Ali Copper Rads, Alloy Wheels, Aluminum, Armoured Cable, Brass, Braziery, Cable, Coaxial Cable, Copper, Copper Tanks, Cat 5 Data Cable, Cat 6 Data Cable, Dry Bright Wire, Electric Busbars, Electric Motors, Gun Metal, Houshold Cable, Irony Ali, Lead, Lead Acid Batteries, Metal Sinks, Non-Ferrous Metals, Plastic Pyro, Plumbing Waste, Pyro, Single Core cable, Stainless Steel, Taps, Wire, Zinc, We Also offer a Scrap Metal Collection Service
Monday, 25 November 2019
China to delay scrap metal reclassification until March
China is expected to postpone the rollout of its as-yet-unannounced scrap metal reclassification policy until March 2020, as private consultations with the industry continue.
A number of scrap suppliers and consumers said the earliest the reclassification can be implemented is March next year, and could even be pushed back to June if further complications arise with the new system. This delay will continue to cap global nonferrous scrap metal trade flow to China, the world's largest buyer.
Until the reclassification policy is implemented, Chinese buyers' import volumes will continue to be restricted by the quarterly import quota issued by the environmental authority. From 1 July 2020 onwards, all buyers will require licences issued under approved quarterly quotas before they can import any scrap metal. The scrap import quota volume has been falling and has been far below buyers' requirements.
Under the unannounced reclassification proposal, the required copper and aluminium content in Chinese scrap imports will be raised and impurities minimised. The proposal listed complex mandatory inspection procedures under which every batch of scrap imported into China will be sampled and tested for metal content, impurities and recovery rate.
Aluminium scrap will be required to be packaged according to size (65mm, 28-65mm and 28mm) and should be visually regular. The packaging should contain the scrap's description, size, weight, aluminium and alloy content, metal content, recovery rate, packaging type, origin and executive standard.
The scrap industry outside China was alarmed by the extent of the proposed standards and requirements, which are seen by many as exceedingly rigid and stringent. Many suppliers questioned the policy's practicality and cost-effectiveness.
"It's going to be very tough if you send 10 containers and they check four... that's going to cost. Everything is possible, it just has a price tag. It's going to put the trade in a couple of companies, which have the possibility to finance it. For small companies, it's going to be a nightmare," a European scrap buyer said.
The new requirement will add €20/t($22/t) in processing costs in order to package aluminium scrap according to sizes, a European scrap supplier said, adding that if the proposal is implemented in its current form, it may drastically reduce or even halt scrap imports to China.
"This is crazy. If this goes through, China will not receive any scrap. China doesn't have enough scrap. They will try to buy it in ingot form," the supplier said.
Melting and additional processing is required to turn scrap metal into ingot form, which is classed as raw material and for which there is no import restriction into China.
"If you have copper scrap and granules, you melt it into ingots and it would be refined when it reached China. That's heating up the metal twice. It's more energy-intensive. That's not logical if you want to reduce pollution. I don't think that's the right way to do it," a second European scrap supplier said.
Some market participants maintained that China will remain the largest scrap buyer in the world and sellers will have to find a way to process scrap to meet the new standards.
"For the past 15 years, the scrap industry was supported by the Chinese. They are the market maker," a third European supplier said. "Now the Chinese have recognised they paid too much for scrap metal for the past 10-15 years. We have to find ways to treat this scrap. India can't take all these materials."