India and Malaysia set the quality bar higher for scrap metals

Higher quality standards for scrap in the important markets of India and Malaysia were reviewed by regional experts during the latest trading forums organised by the Bureau of International Recycling (BIR). One speaker forecast ‘a paradigm shift’ in secondary metal production in India in the next five to seven years.

An oversight of the Indian government’s proposed introduction of scrap classifications or standards in a bid to obtain cleaner, higher-quality raw materials was given by Dhawal Shah, managing director of Metco Marketing and the new president of BIR’s non-ferrous metals division. He said brainstorming across the industry was anticipated with changes being implemented possibly within the next six to nine months. A Metals Recycling Authority (MRA) acting as a single interface between trade and government was expected and that could deliver limits for metallic and non-metallic impurities. 

‘The Indian government has seen the writing on the wall and decided to set up the MRA so that the metal recycling industry in India fulfils its full potential,’ he said. ‘We must try to improve the domestic supply chain but also realise that India benefits from imported scrap. I believe that in five to seven years we will see a paradigm shift in the secondary metal production industry in India.’

New rules to affect Malaysia’s scrap imports  

Panellist Eric Tan of the Malaysia Non-Ferrous Metals Association warned that, in their current form, new quality guidelines for importing scrap into his country would ‘cause more harm than good to the whole non-ferrous metals industry in Malaysia’. The key points of concern on which the country’s metals industry is continuing to lobby its government include thresholds of 0% contamination for hazardous/e-waste and 94.75% for metallurgical content which, Tan warned, would affect 80-90% of Malaysia’s scrap imports. He argued that the proposed pre- and post-shipment inspection regime would damage Malaysia’s competitiveness in terms of scrap procurement. Some leeway would be given to importers for a period but he was unsure how long. 

Strong recovery, major challenges  

Looking more widely at the non-ferrous sector, Shah said the post-Covid recovery had been strong in term of overall trade volume but he cautioned those taking part in the webinar that ‘unpredictability and hyper-volatility’ were keeping non-ferrous metals recyclers ‘on the edge of our seats’. Describing the current trading conditions as chaotic and ‘completely unprecedented’, he said the challenges facing the sector included: metals prices at almost historical highs with intra-day volatility of up to 5%; supply disruption owing to container logjams; ‘skyrocketing’ prices for alloying inputs such as silicon, magnesium and manganese; semiconductor and energy shortages; and growing inflation.

Free scrap trade remains crucial

Murat Bayram of European Metal Recycling pointed out that the use of raw materials from recycling in production processes saves on resources, energy and CO2 emissions. Defending the principle of free and fair trade, he asked: ‘If the climate doesn’t stop at national boundaries why should raw materials from recycling?’ He concluded passionately: ‘The trade in raw materials from recycling must be promoted much more strongly to enable sustainable production everywhere in the world. In short: less trade leads to less recycling; more trade leads to more recycling.”

Magnesium supply headaches

Reviewing developments in China, Shen Dong of OmniSource Corporation in the USA pointed to recent power consumption restrictions leading to the temporary idling of some industrial facilities, including smelters. Franco Dalpiaz, director raw material purchasing for major Italy-based recycled aluminium alloys producer Raffmetal, said power rationing in China had drastically reduced magnesium deliveries to Europe where stocks of the alloying metal could run out by the end of November. He warned this could lead to production stoppages in the aluminium value chain affecting, for example, the automotive and packaging sectors.