US non-ferrous scrap exports to China have been brought to a screeching halt on news that the Chinese government has implemented a 30-day suspension on its North America customs inspections division.
The inspection operations of Chinese Certification and Inspection Group (CCIC) North America will be curtailed from Friday May 4 through June 4, US exporters have confirmed to American Metal Market. While details are still unclear, shipments of all grades of non-ferrous scrap have frozen for now, sources said.
The suspension effectively freezes all non-ferrous scrap shipments from the United States to China, sources said, because that group was responsible for pre-shipment inspections and certificates to ship material into the country. American Metal Market could not immediately confirm whether the temporary suspension would apply to exports from Canada and Mexico as well.
The Institute of Scrap Recycling Industries (ISRI) said the move will have serious repercussions for exporters.
“There is no doubt that this will severely impact US scrap exports to China. We are working aggressively to gain more information and to find a way to resolve this situation as quickly as possible and in a way that minimizes the impact on our members,” ISRI said.
Sources said shipments made before Thursday May 3 that have proper certification will be accepted by the Chinese government but subject to inspections upon arrival at port. No CCIC inspections will occur beginning May 4, suggesting that exporters will be unable to ship into China.
“CCIC has stopped operations in the US. They are saying it has to do with poor performance from its group based in the US,” one exporter said.
Non-ferrous scrap consumers in China have sent notification letters to US-based suppliers stating that they are freezing all buying activities of material from the United States until CCIC inspections can be resumed.
“We just received the notice that CCIC North America will be closed in the next 30 days, which is required by the Chinese Government,” one Chinese scrap consumer said.
“This is a very sudden policy. Thirty days will definitely effect the market. We are not excited about this. All that we can do is wait for more detailed information. We are very concerned,” a second Chinese scrap consumer said.
“The notice went out stating that CCIC North America is suspending operations for the next month. We’ve spoken to all our Chinese buyers - they cannot buy any electric motors from the US. Zorba buyers are still not sure how it will affect them,” a second exporter said.
The market is still grappling with how this announcement will affect trade with China.
Others sources said they were exploring new markets to ship their material into or actively seeking a workaround.
“Everything - brass and copper scrap and electric motors - has been impacted. You can’t ship these items to any port in China at the moment. We’re looking for new homes with a more favorable business environment,” a third exporter said.