NEW YORK Heightened inspections of Chinas scrap imports will continue indefinitely, officials from China Certification & Inspection Co. Ltd. (CCIC) told AMM.
The initiative, dubbed "Operation Green Fence" by market participants, began in March and was scheduled to end Nov. 1, according to Wang Jiwei, vice president and secretary-general of the China Nonferrous Metals Industry Association Recycling Metal Branch (amm.com, May 7).
But CCIC has not received an official statement from any government agency in China about ending the inspection effort in November, said Sarah Peng, manager of the general business affairs department at CCICs U.S. headquarters in Rancho Cucamonga, Calif. "We will perform pre-shipment inspection for scrap materials ... as usual," she told AMM, adding that rumors of loosening restrictions were largely unfounded.
The news could signal a dramatic shift in the global flow of lower-grade nonferrous scrap that previously found a home in China. Shippers of zurika shredded nonferrous sensor-sorted scrap mainly comprised of stainless steel, insulated copper wire, aluminum, copper, lead, magnesium, nickel, tin and zinchave been waiting for Chinese officials to loosen environmental restrictions and allow Chinese buyers to resume purchasing activities. Now it appears they will have to look for other destinations for the material.
"I just spoke to one of my colleagues who is a purchasing manager at a major processing yard in China and he believes that this (Operation Green Fence) will never go away. In fact, he said most recyclers in China think that restrictions on imports of scrap could get even tighter in the coming months," one exporter told AMM.
"Domestically, there are a few low-grade processors of zurik but they all know China will not take the material and consequently the price has plummeted," he said, noting that he had seen the price of zurik drop as much as 30 percent over the past six months. "There just are not that many buyers out there," he said.
A second exporter said that he had initiated a domestic sorting operation for his zurik in hope of producing a higher-grade 304 stainless package or a contaminated stainless package that would be attractive to U.S. buyers.
"It appears that China will no longer be a buyer of zurik and other lower-grade shreds," he said, suggesting that domestic recyclers should either find alternate international buyers or look for ways to upgrade the material. "At this point, you either have to get on board with the new program or get tossed off the ship," he said.
Some, however, feel that Chinas stepped-up restrictions have created a more principled international scrap market. "In a way, people were shipping everything to China, including junk. But right now, the market is fair and exporters know they have to adhere to higher quality standards," said a purchasing manager at a China-based aluminum smelting company. "If anything, the price of higher-quality nonferrous auto shred (zorba) could go up because there is still a very strong demand for good, clean material."