DeAnne Toto |
China introduced “Operation Green Fence” in February, and recyclers in the United States began feeling its effects in March. As I write this in early May, the topic is still very much on the minds of domestic recyclers, as many of them wonder whether the initiative will last through November as the Chinese government has indicated. The effects of Operation Green Fence illustrate just how much influence China continues to exert on secondary commodity markets in the United States, even though the country’s economic growth is said to be losing its momentum. Pricing has softened for a number of commodities, including some recovered fiber grades, copper and commodity-grade plastics. Some materials, such as old newspapers (ONP) and mixed paper from single-stream material recovery facilities (MRFs), according to sources, simply are not moving overseas any more for fear of rejection. Other sources say shippers are reticent to ship clean postindustrial plastic scrap to China because if trace amounts of unwanted materials are present, it can lead to trouble for the shipper in terms of rejections and demurrage charges. According to PPI Pulp & Paper Week, pricing for recovered fiber destined for export to China declined nearly across the board for transactions in May. DLK (double-lined kraft) saw steep declines, falling by $12 per ton to $188 out of Los Angeles, which includes the Port of Long Beach. Pricing for commodity-grade secondary plastics is declining more quickly than that for engineering grades, sources say. They also express reserve on the part of U.S. buyers, who they say are purchasing smaller amounts of material in anticipation that pricing will decline further as a result of China’s enforcement of its existing policies. Copper scrap naturally also has felt the effects of China’s crackdown on incoming shipments of scrap material, considering how much of the material the country consumes. According to the London Metal Exchange, the price of copper per metric ton declined from $8,069.55 in February to $7,202.57 in March. Some recyclers express hope that Chinese consumers of scrap materials will become frustrated with the declining flow of recyclables into the country and urge the central government to ease off of its aggressive inspections. Others wonder if the lower commodity prices were an intended consequence of Operation Green Fence. While the answers to these questions are far from clear for the time being, recyclers say they hope the situation will become less murky with time. |
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