NEW YORK Export prices for nonferrous auto shred, or zorba, have risen over the past week as several exporters said Indian consumers were looking to capitalize on Chinas crackdown on raw material imports.
Most exporters pegged prices for material with 94- to 95-percent metallic content at between 77 and 80 cents per pound, up about 1.5 cents from a week ago, while material with 90- to 92-percent metallic content was up 1 cent at 74 to 75 cents per pound.
As exporters continue to fear increased inspection and rejection of zorba shipments to China under the crackdown, known as Operation Green Fence, India has become a favorable destination for the lower-quality zorba product (90- to 92-percent metallic content) because Indias inspection process is far less stringent, exporters told AMM.
One shipper said he was moving product to India because he no longer wanted to deal with inspections by China Certification & Inspection Co. Ltd. (CCIC). "I have been going to India to avoid CCIC inspectors," he said. "If there is a hard way to do things and an easy way, I would tend to choose the easy way. You cant just stand there holding your gym shorts waiting for loads to get rejected in China."
Several plants have also recently come online in India, which has spurred additional demand from importers, exporters also noted.
"The main reason India has entered the picture is because of the new factories," a second exporter told AMM, adding that Indian consumers were able to deal with lower-grade material largely because of their ability to tap into a low-cost work force that is able to hand sort material. "Previously, buyers were looking for higher-grade zorba, but because so much low-grade material has become available as a result of Green Fence they are looking to explore that market."
Others speculated that Indias emergence into the zorba market might be the start of a major shift in international purchasing of nonferrous scrap. "What I have heard about India is that they have started to actively look for material," a third exporter said. "I think India will be a buyer for the foreseeable future, and over time they certainly have the potential to experience explosive growth."
Meanwhile, exporters continue to be frustrated by Chinas ever-changing import regulations and environmental initiatives, although demand for material has remained relatively robust.
"We have steady demand from our buyers but we have been alerted that there are additional changes in the future," a fourth exporter said, noting that despite Chinas announcement about loosening restrictions on imports of scrap on Nov. 1 most shippers believe Operation Green Fence is permanent.
"Obviously, they say Green Fence is going away, but I dont think anyone thinks its really going to happen."