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

Container shipping company Hapag-Lloyd has announced it will halt all waste deliveries, including scrap metals, to China beginning September 1.


In a notice to customers this month, the German shipping giant said any cargo that contravenes new legislation reclassifying certain import grades and banning other scrap imports could result in a fine, as well as the cargo being returned by Chinese customs.


In early June, shipping company MSC Mediterranean issued a similar notice to customers, according to media reports, signalling potential supply chain disruptions because of these halts.


These companies’ announcements come as China prepares implementing new legislation that reclassifies scrap metal import quotas, among other recyclables.


Scrap quota delays cause confusion

China was supposed to have released new codes reclassifying certain high grades of aluminum and copper scrap as a resource rather than recyclables in July. However, the Chinese government still hasn’t released the codes clarifying which grades will make the import quotas and which ones won’t. As a result, indicated media reports, companies are unable to send cargoes to China, leaving one of the largest consumers of metal in short supply of these resources.


Copper and aluminum scrap dealers anticipated better imports from China after these rules were announced, following a decline of more than 35pc in copper imports and a fall of around 10pc in aluminum imports last year. Reports also suggested that many scrap dealers that shipped their material early—in anticipation of the change—to countries that have ports close to China will have to contend with their products stranded at those ports unless there is more clarity on the new scrap codes.

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