NEW YORK Some exporters have begun "salting" loads of lower-grade nonferrous auto shred, known as zorba, with shredded nonferrous sensor-sorted scrap, known as zurik, in an attempt to get around regulations at Chinese ports, sources have told AMM.
Zurik, which is comprised mainly of stainless steel, insulated copper wire, aluminum, copper, lead, magnesium, nickel, tin and zinc, is largely regarded as a banned material under Chinas stepped-up enforcement of existing regulations on solid waste imports, known as Operation Green Fence (amm.com, June 12).
"People are running zurik into zorba and hoping they dont get caught," one exporter said. "They are trying to find their way around Green Fence, and mixing seems to be an option some sellers are exploring."
One Chinese buyer said he was aware of the issue and was in the process of addressing the problem with his suppliers. "We told them we knew this type of activity was taking place and are not OK with it; its not the right thing to do," he said. "For us, we told our major suppliers that if they secretly mix loads it will change the value of the shipments and could lead to rejection at the port."
A second exporter said he had heard rumors of sellers attempting to mix packages. "Its a smart thing to do if you dont get caught," he said, adding that he knew of sellers who had established covert deals with Chinese consumers involving shipments of zurik disguised as zorba. "I am not saying I wouldnt do it at some point, but I like to play by the rules. I dont like to chance issues, chance claims and alienate consumers."
Such covert deals are made out of necessity, not greed, the second exporter said. "If I wasnt a play-by-the-rules type of guy, I would probably do it. Basically, these people (sellers) are being forced into mixing because they need to move material. Zurik usually runs 95-percent metallic. It should make it into China all day long."
"People are trying anything right now because the stainless market is in the toilet," a third exporter said. "It can be very tough to tell the difference in shred packages, especially for inexperienced inspectors and customs officials."
If caught, sources said there could be consequences, but with most Chinese buyers still willing to take the salted material at a slight discount, exporters say its worth the risk regardless.
"(If discovered), the consumer will put a claim in (and) ask for a reduction, but usually that reduction amount isnt as much as they should be getting back; the exporter often comes out on top," a fourth exporter said. "Anybody that denies that they add junk to loads is just plain lying. All scrap dealers, especially those that work in the export arena, are always looking to make up for the hassle of shipping material."