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No let-up in domestic Chinese metals recycling

Experts on the Chinese economy believe the next five years will see a renewed focus on boosting the domestic generation of recycled non-ferrous metals. There will be even greater emphasis on developing smarter treatment technologies, they say.

The expectations are based on an analysis of China’s latest Five Year Plans covering the period 2015-2025 from Ma Hongchang, a regular advisor to the Bureau of International Recycling (BIR).

Writing in the global organisation’s latest Mirror for the non-ferrous sector, he says the non-ferrous sector underwent profound changes during the latest plan up to 2020, shifting from an import-oriented to a domestic-oriented model.

Ma points out that domestic copper and aluminium scrap now accounts for, respectively, more than 66% and 81% of the total supply of the related recycled raw materials. Domestic output of recycled non-ferrous metals in 2020 accounted for 24% of China’s total output of non-ferrous metals. The target of total output for recycled copper (27%), aluminium (20%) and lead (45%) was achieved on schedule last year.

‘Over the next five years, China’s non-ferrous recycling industry is expected to maintain a steady growth rate,’ Ma observes.  ‘Objectives include further improvement in the operational quality of the industry, greater investment in research/development of metals recycling technology and a focus on the development of treatment technologies relating to, for example, aluminium ash and copper slag.’

The Mirror also includes an observation from BIR non-ferrous division board member Shen Dong of the US-based OmniSource Corporation that the latest Chinese data indicates increases in secondary aluminium and copper tubing production, the result of steady demand from downstream industries and recovery from the pandemic. He says a shortage of aluminium scrap has been balanced by ingot imports.

Shen also notes reports of delays at Chinese customs during material inspections owing to new rules on sampling and defining the new specifications. ‘This is still early days for the new recycled raw material classification system and many expect clearer inspection procedures to emerge in the coming days,’ he says.

Export view

UK board member Susie Burrage of Recycled Industries also comments on the new quality standards and customs delay. ‘Traders and merchants are being advised not to move material if they think it is risky,’ Burrage says. ‘While China is still interested in importing UK scrap and sellers here are still keen to do business, three weeks in customs queues may cause cash-flow problems for some UK companies. Merchants are gaining no privileges from having their material CCIC-inspected as it is still going through the full customs inspection process. The advice to merchants is to send material bagged or cable-tied.’

Stellar’ Indian growth

Fellow board member Dhawal Shah of Metco Marketing writes in the Mirror that an improvement in business conditions in India since last October ‘has left everyone stunned’.

‘Sales of new cars, white goods, houses, etc have made a stellar comeback; the stock market is now trading at its historical high; backed on new dollar inflows, the rupee has rallied considerably; and domestic demand and metals prices have remained robust.’

Shah reports that most sectors are on a positive growth trajectory and the GDP contraction for 2020 will be around 7.7% compared to earlier predictions of 10-11%. ‘This would still represent the lowest for seven decades but India needs to swallow this bitter pill and move on.’ He says.

‘Overall, most secondary smelters and scrap processors/traders are back at full capacity. The global rally in metals prices will see them generating profits on their booked inventories. But a sense of risk and caution is now palpable in all new purchases and trades as markets have started to move sideways or even dip.’

Fragmented US

A view of the US economy as ‘fragmented’ comes from Rick Dobkin of Shapiro Metals. ‘The unemployment picture is still bleak while manufacturing is booming,’ he says. ‘Manufacturing activity as measured by HIS Markit is still in expansion mode, being held back by labour shortages and headwinds regarding worker health and safety.

‘On the metals side, the tightening market has become even more challenging for consumers as supply continues to dwindle and prices continue to rise.’

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