NEW YORK U.S. scrap metal
exporters are increasingly concerned about Chinas
stepped-up supervision of scrap shipments to the country. While
many believe that the program, commonly referred to as
"Operation Green Fence," is a temporary initiative, others
believe that the country will continue to strengthen its
"China has a duty and a
sovereign right to protect its environment and its citizens
from hazardous materials," Robert Stein, president of the
Bureau of International Recyclings nonferrous division
and senior vice president of nonferrous marketing at St.
Louis-based Alter Trading Corp., said during a speech at the
Institute of Scrap Recycling Industries annual convention
and exposition in Orlando, Fla. "These regulations come at a
cost to shippers, and it adds a level of administrative
oversight and burden that can, for a number of reasons, be
problematic to the efficient movement of our scrap."
The current restrictions date
back to a 2006 report by Chinas Ministry of Environmental
Protection listing banned items found in nonferrous scrap
amm.com, March 13). According to several market
participants, Chinese customs officials had loosely enforced
the restrictions until a few weeks ago.
"We are getting e-mails every
day from our importers talking about whats allowable and
whats not," one exporter told AMM. "With Green
Fence being enforced, the list of acceptable materials is
Many exporters at the ISRI
convention posited that the crackdown on scrap shipments could
be tied to a perceived slowdown in the Chinese economy and an
increased awareness by government officials of Chinas
growing environmental problems.
"The boom is over," a second
exporter told AMM. "China has reached a critical
threshold, and we are all going to have to figure out where the
next major export market will be."
Others countered that Green
Fence is a politically motivated initiative that will be
relaxed once the leadership transition in China is
"The environmental situation has
become very serious in the mind of the Chinese public and
politically important," Adam Minter, a Shanghai-based
correspondent for Bloomberg World View, told conference
attendees. "When we talk about Green Fence ... you have to keep
in mind that there is genuine political pressure that actually
is calling into question the legitimacy of the Chinese
government as it now stands."
Minter said that a lack of
cohesion within the Chinese government is creating uncertainty
for midlevel officials. "There are all kinds of new government
officials who dont know who they are answering to, and
they all want to impress the new administration," he said.
"Sooner or later, someone is going to read them the riot act
and say, We actually need this metal and we need to start
letting this stuff in again."
Despite the stepped-up
supervision, officials from the China Certification and
Inspection Group (CCIC) have remained relatively tight-lipped
about the details of Operation Green Fence. "We did not receive
any regulation change notice from China ... in the past few
months," Sarah Peng, general business affairs manager at West
Covina, Calif.-based CCIC North America Inc., told AMM
in an e-mail. "We are doing preshipment inspection for scrap
materials according to the China inspection standard
GB16487-2005 as usual."