Restrictions on scrap trade could inhibit recycling

While many nonferrous scrap grades have enjoyed higher prices and increased demand following the pandemic-induced lows of 2020, a number of uncertainties remain. Chief among them are measures that have been proposed by some governments that could restrict the flow of scrap.

During the Bureau of International Recycling (BIR) Global eForum Nov. 2, Dhawal Shah of India-based Metco Marketing and president of the BIR Non-Ferrous Metals Division, noted the uncertainty that has affected the market since May, fueling intraday volatility of up to 5 percent. Also in that time frame, container logjams have affected supplies, while power shortages have affected industrial output, he said. “If this was not enough, joining the party late is the high backwardation, creating mayhem in terms of open price and hedges.”

He added, “Frankly, I find the current chaos completely unprecedented.”

Despite the chaos, Shah said, “The post-COVID comeback for our industry has been strong when you look at overall trade volume.”

Those trade volumes could be affected by changes related to scrap import policies, with China having led the way, followed by Indonesia and Malaysia. “Now, India and Europe, too, are talking about new guidelines or statutory requirements related to scrap flows,” he said.

“In short, less trade leads to less recycling, more trade leads to more recycling.” – Murat Bayram of European Metal Recycling Ltd.

India has proposed scrap classifications that would be created under the Bureau of Indian Standards that could define percentage limits for metallic and nonmetallic impurities, Shah said. These classifications potentially could go into effect before the end of 2022.

“All stakeholders … need to be prepared for this change,” he said, which could limit the country to importing only materials of higher purities.

Shah added that an imminent European Commission proposal would revise European Union waste shipment regulations so that they could materially affect scrap flows.

Regarding this potential change, Murat Bayram, who is based in Germany for European Metal Recycling Ltd., which is headquartered in the United Kingdom, said using scrap saves resources and energy and reduces carbon dioxide emissions. International trade ensures these materials “arrive where they are needed.”

He asked, “Don’t other countries outside the EU have a right to sustainable production?”

Rather than restrict scrap trade, Bayram said it should be promoted more strongly to enable sustainable production worldwide. “In short, less trade leads to less recycling, more trade leads to more recycling.”

Eric Tan of the Malaysia Nonferrous Metals Recycling Association said that country’s scrap import restrictions are intended to curb illegal imports of hazardous waste or e-waste. However, the guidelines will not meet the purpose and instead “will cause more harm than good to the whole nonferrous metal industry in Malaysia.”

Tan said thresholds of 0 percent for hazardous or e-waste and 94.75 percent for metallurgical content would affect 80 to 90 percent of Malaysia’s scrap imports and a proposed pre- and postshipment inspection regime would damage Malaysia’s competitiveness in scrap procurement.