Editor's Letter

A Brand New Calendar

 

Detailed knowledge of supply chain schedules is not necessarily taught in any school, and, even if it was, changes in the economy, management practices and holiday schedules each can create unique circumstances just when someone thinks he or she has a supply chain figured out.

Despite those challenges, recyclers in the United States and Canada are still able to formulate in their minds and on their accounting spreadsheets some ideas as to how summer vacation seasons, the holiday retail season, the automotive model changeover season or even deer hunting season in some parts of the country will affect the supply and demand of materials that they trade.

In addition to anticipating the North American seasonal calendar, recyclers this decade find themselves increasingly paying attention to China’s business, cultural and national holiday calendars.

It has become clear that even recyclers who don’t deal directly with customers in China or with brokers who send material there are affected by China’s massive end market. The buying habits of China influence global demand and pricing in ways that affect even those recyclers who are a long way from the Pacific or Atlantic coasts.

The Chinese New Year season might be the most widely known among North American recyclers. Also known as the Spring Festival, the date marking the start of the new lunar year has been celebrated for some 2,000 years. It typically falls in late January or early February.

The Chinese New Year celebration is followed 15 days later by the Lantern Festival. The proximity of these two holidays has resulted in this time becoming a traditional "downtime" for Chinese industry.

Two different three-day holidays occur during the spring: Spring Festival and Labor Day. The latter always coincides with May 1, while the Spring Festival timing depends on how the lunar calendar falls.

The Chinese business calendar also is subject to interruption from a fall holiday season. National Day, Oct. 1, often falls around the same time on the calendar as the Mid-Autumn Festival, which this year was Oct. 3. The coinciding of these two holidays can affect how industrial facilities arrange their production and maintenance schedules.

In the current trading environment, with China’s mills and smelters consuming healthy percentages of the world’s scrap metal, paper and plastic, recyclers in North America will likely start flagging these holidays well ahead of time as they try to forecast demand trends for the year ahead.

Recyclers in North America have long had an understanding of the seasonal aspects of secondary raw material flows.