ISRI2023: China opens door wider for nonferrous scrap

Throughout the 2010s, the message from the Chinese government that it considered imported scrap materials to be “foreign garbage” was an ongoing source of turmoil and uncertainty for recyclers in the United States and other nations with scrap surpluses.

While recyclers of paper and plastic continue to contend with Chinese policies based on that notion, nonferrous metals recyclers have experienced some relief, according to panelists at a session focusing on China at the Institute of Scrap Recycling Industries (ISRI) 2023 Convention & Exposition in Nashville, Tennessee, in mid-April.

Zhang Lin, deputy secretary general of the Beijing-based China Nonferrous Metals Industry Association Recycling Branch (CMRA), portrayed a nonferrous scrap import sector that in 2022 experienced a rebound in volumes following a suppressed level of activity in 2020.

According to Zhang, China’s imports of 1.77 million metric tons of red metal scrap and 1.52 million tons of cast aluminum scrap in 2022 represented about 40 percent growth compared with 2020 import levels.

She described China’s recycled-content nonferrous metals industry as being in an “aggressive growth” phase, and included lead battery and lithium-ion battery recycling growth along with the copper and aluminum markets.

Zhang said China currently uses scrap to make 47.9 percent of its finished and semi-finished lead, 21.5 percent of its aluminum and 14.9 percent of its copper. She indicated that the nation’s goal of reaching its carbon emissions peak in 2030 and carbon neutrality in 2050 is poised to boost those figures.

The CMRA, which is state-affiliated, is seeing “unprecedented policy depth and strength” to support metals recycling in the current five-year plan, said Zhang. She listed dismantling and sorting companies as among those eligible for government support under current policies.

Regarding the future of nonferrous scrap imports, Zhang said in 2022 the U.S. was responsible for 18 percent of imported nonferrous scrap. “The U.S. is an important source of imports for the recycling of copper and aluminum,” said Zhang. She also cited the ASEAN (Association of Southeast Asian Nations) region as the source of 40 percent of such imports.

Robin Cai, managing director of the Singapore office of St. Louis-based Alter Trading Corp., said both the recent rebound in Chinese imports and the growth of activity in the ASEAN region are likely tied to various Beijing policies of the past 10 years or so.

Cai said that for some 25 years, China was unrivaled in its hunger for scrap metal, “especially on copper demand.” Policy changes in the 2010s, however, caused demand volatility in China and the creation of new importing and processing destinations in ASEAN countries including Malaysia and Thailand. Many of the same entrepreneurs who had been importing scrap to China set up shop in those nations as a reaction to Beijing policies, said Cai.

In reviewing those policies, Cai listed difficult-to-reach purity levels, volume quotas and mandatory China Certification and Inspection Group (CCIC) inspection processes as hurdles that diminished scrap shipments directly to China. (Also mentioned as a factor were U.S.-China trade disputes that have added a tariff to some grades of U.S. scrap.)

Reforms introduced by China in late 2020 have been helpful, said Cai, and have allowed trade flows to rebound subsequently. The November 2020 changes included: re-labeling several grades of copper and aluminum scrap from a “waste” to a recyclable resource; abolishing quotas and a previous license or permit system; and dropping the CCIC inspection process.

Cai said ending the CCIC involvement was “especially important,” calling its previous use a “costly and time-consuming exercise.”

She said the largest hurdle for overseas recyclers currently involves a 99.1 percent purity level for imported grades. While that quality can be achieved, it is a costly process involving either additional labor or additional passes through sorting machinery.

In the meantime, said Cai, if Beijing insists on that quality threshold, buyers in the ASEAN region as well as an increasingly competitive Indian market will have an advantage when bidding for material. Cai said recycled raw materials can help China reduce its carbon footprint, and she hopes to see “policymakers rise to the opportunity” to compete for the world’s scrap.

ISRI2023 took place April 17-20 at the Music City Center in Nashville.