China freezes out US scrap shipments for 30 days

The Washington-based Institute of Scrap Recycling Industries (ISRI) has notified its members that it has learned that the U.S. operations of CCIC North America (CCIC NA) have been suspended for one month, effective May 4 through June 4, 2018.

“As a result, no [outbound scrap shipment] inspections can be arranged or certificates issued during this period,” states ISRI, as CCIC’s preinspection system in North America has been temporarily closed. “There is no doubt that this will severely impact U.S. scrap exports to China,” the organization says in its May 3 announcement.

According to ISRI, “This action affects only the scrap recycling industry and only shipments from the United States [and] containers that received CCIC approval prior to May 4 but that have not yet obtained their certificate will encounter difficulty at the port of entry.”

The association also indicates that exporters responsible for containers that fail CIQ (China Inspection and Quarantine Services) inspection at a Chinese port could face losing their AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine) export license.

According to ISRI, the Chinese General Administration of Customs has issued a notice stating specific steps are being taken because of the failure of “multiple batches” of material arriving at Chinese ports that did not meet the government’s environmental protection standards.

Beginning May 4, all shipments arriving from the U.S. will be required to be 100 percent opened for inspection. Shipments containing unwanted materials will be subject to “100 percent examination with lab testing analysis,” in a procedure that one trader based in south China suggests would cost about $20,000.

The materials listed as unwanted in the ISRI notification are: “hot plastic waste plastics, metal scrap containing powder and the waste papers containing hard-to-be-identified special paper (silicone paper, wet wax paper, thermal paper, moisture-proof paper, etc.) and waste paper with suspected hazardous materials.”

Other steps are being taken:

• CCIC NA has been suspended from performing inspections and issuing certificates for scrap materials bound for China effective May 4, 2018, and continuing through June 4, 2018.
• CCIC NA has been placed on an “A category risk early warning measure.” This penalty is aligned with AQSIQ regulations issued late last year that became effective Feb. 1 and includes new guidelines for holding exporters and inspectors responsible for shipments that fail to meet quality standards.
• Those same AQSIQ regulations also allow independent inspection companies to apply for a Chinese government license to issue preshipment inspection certification for scrap exports. "Unfortunately, we believe there have been no licenses issued to any inspection company outside of CCIC NA since Feb. 1st, thus the penalty has been placed on the industry's only option for preshipment inspection and thus effectively shuts down the trade," ISRI says. 
• Port inspectors are directed to carefully review inspection and shipping documents to verify, among other information, that the preshipment inspection certificate was issued before shipping, proper preshipment inspection was conducted, and all addresses and other information is accurate.

The action takes place at the same time the two nations are trading tariff enactments and media reports are circulating that Chinese buyers have halted their purchases of U.S. soybeans.

It also occurred on the first day of a two-day round of negotiations between high-level Trump administration negotiators and the Chinese government on critical aspects of the U.S.-China trade relationship. Neither side in those negotiations made any public announcements at the end of the first day (Thursday, May 3), and when the negotiations concluded at the end of China’s workday Friday, May 4, the Xinhua news agency of China reported only that “considerable differences still exist on some issues [and] continued hard work is required for more progress.”