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Coronavirus disrupts Chinese recycling sector

The outbreak of the coronavirus, which has cost more than 800 lives so far and locked down 27 major Chinese cities and major businesses, is increasingly affecting the country’s recycling infrastructure, scrap industry leaders confirm to Recycling International.

‘Metal scrap shipping to China is getting released by customs as usual, but smelters are facing a paralysed logistics system and operation problems,’ says David Chiao, president of US-based Uni-All Group.

Factories including scrap recycling facilities are not allowed to operate. ‘Most of the coastal factory and office workers are ordered to stay home, migrant workers are not able to get back to their posts,’ says Chiao, who adds that some shipping lines and port authorities have waved port demurrage and detention fees ‘to help importers in this difficult time’.

Long term impact

Although mixed metal scrap has been shipped elsewhere other than China since 2018, the metals after processing still rely on China’s consumption, according to Chiao. ‘So if the epidemic outbreak is not under control in the next few weeks, the metal market will certainly be affected.’

Scrap recycling facilities and smelters in the coastal city of Ningbo were expected restart production on Monday 10 February, after the prolonged Chinese New Year, however, this is now ‘doubtful’, as Chiao has learned from his customers.

Plastics scene hurt too

The unexpectedly long factory holiday has caused major problems for in the plastics trade ‘as a normal inventory cycle has slowed down enormously which deters the buying interest of many recyclers,’ says Steve Wong, ceo of Hong Kong headquartered plastics recycling and trading firm Fukutomi.

Wong is seeing major impact arising from the Coronavirus outbreak. ‘We hear stories of several thousands of new infections per day which obviously severely harms business chains in China and the rest of the world,’ he says.

Less efficiency

While the cities lockdown helps to prevent the spread out of the virus, it also halts the normal human flows and logistics movement which affects the supply chains of many sectors, upstream and downstream, ‘including the plastic recycling industry’, says Wong.

‘Although many factories are planning to resume operations on 9 or 10 February, there are strong doubts that factory operations can maintain the same efficiency as before given that a lower workers density at the workplace is encouraged to reduce the risk of infection,’ he argues.

Conference postponed

Meanwhile, the Coronavirus (or Wuhanvirus) is also disrupting China held conferences. CHINAPLAS 2020, the 34th International Exhibition on Plastics and Rubber Industries on 21-24 April 2020 in Shanghai will be postponed due to the epidemic. ‘Health and safety of all show participants are at our top priority, therefore we have to make this decision’, says the event organiser.

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