Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Ministry of Ecology and Environment in unison with other departments including department of customs China announced a total ban on the import, stacking and disposal of solid waste in China. Market participants are taking a wait and watch approach and are hopeful that China may announce new policy and or make some amendments in the current announcement before Jan 1, 2021. 


Few Chinese steel scrap recyclers shared that if imports are allowed freely Chinese volumes would soon return to the pre-2017 level. 


Revised Prevention and Control of Environmental Pollution by Solid Wastes Act came into force in September. 


According to the new announcement, no import licenses for imported solid wastes will be granted. The ministry added that the pre-existing licenses will expire by the year-end. Traders dealing in non-ferrous scrap informed Davis Index that some manufacturers have landed in a fix as they still have unused quota limits for imported scrap.


With this special announcement, the existing quotas will expire in over a months’ time. Since July 2019, China had followed the quota system for the imports of non-ferrous scrap. China recently announced the import of 5,980mt of copper scrap in mid-October. On Nov 1, China announced that copper and aluminium scrap meeting its high re-classification standards will be allowed into the country. As per this notification, high purity copper scrap and aluminium scrap is being allowed at Chinese ports from Nov 1 as raw material and not waste.


Sources shared that aluminium scrap import is being made through Guangdong port after being polished and repacked in Hong Kong.  However, sources shared that Guangdong Smelters can’t make it to mass production because the import aluminium scrap needs to be extremely clean and shining. Davis Index heard that due to this, smelter must hold on to imported aluminium scrap at the plant as no scrap is being allowed before inspection and lab test. 


A leading indenter of ferrous scrap in South Asia shared that Chinese scrap procurements for 2021 are ambiguous. There were no enquiries from the Chinese partners and indenters are still not sure and will wait for some documentary notification to be sure that the new regulation is in place.


Another participant informed Davis Index that for ferrous scrap, even if the imports are completely banned next year, its impact will be very little because strict quality restrictions have already led to a drop in imports. China has over 220mn mt of ferrous scrap generation which could be enough to meet its increasing domestic demand, he added. In 2018, the country imported around 2-2.5mn mt of ferrous scrap that has dropped below 10,000mt in 2020. 

Leave a Reply

Your email address will not be published.