November is more painful for container transport
Several scrap metal dealers contacted by Recycle today say fears that a new European Union rule will disrupt shipments out of Europe are starting to emerge. Traders said that European exporters who have taken the appropriate procedural steps are still able to export to the People’s Republic of China, but buyers from that country may still be reluctant to source from the EU.
In an article from November 29, AMM fast markets reported that the Chinese government did not respond to a questionnaire from an EU agency. The questionnaire was designed to allow governments to let companies in their jurisdiction choose to receive circular shipments of raw materials, up to and including high-value metal grades.
A potential failure of the new EU procedure is the European Commission’s use of the word ‘waste’ to describe circular products, including those with a long established value as an industrial raw material. Many buyers in China are reluctant to accept European scrap shipments, fearing problems from their own government or the EU.
The situation was predicted as early as January by panelists in the Brussels-based Bureau of International Recycling (BIR) ‘The Challenge’ series, who meet periodically to discuss issues related to the global scrap metal trade.
In his January session, seasoned trader Michael Lion referred to the yet to be finalized (but proposed) EU rules and saw “the possibility of some form of export control.” Panelist Murat Bayram, who works in Hamburg, Germany for UK-based EMR Ltd, joined Lion in concern. Bayram felt that what was looming “a very, very dangerous situation”.
Reached on Nov. 30, Bayram said that in-depth knowledge of the situation had been of use to companies such as EMR who had previously applied for an End of Waste (EoW) license, “knowing that China has announced that it will not “Would not allow any waste to be sent to China. So we, for example, can still export.”
But the situation is far from clear for buyers or sellers, adds Bayram. “A lot of [processors in Europe] try to avoid exports even with the EoW license, because the domestic market is competitive and one can avoid additional costs if the containers are not accepted on the other side of the world, while load a truck here and bring it a few kilometers to the factory is quick and easy, ”he comments.
Another non-ferrous trader, based in Asia but sourcing from Europe, says his recent experiences are similar. He notes that some buyers in China have found that ISO or EOQ (European Organization for Quality) certified facilities can still ship from Europe to China. Others, he says, are asking for scrap sent from British ports.
David Dodds, CEO of Ipswich, UK, Sackers Recycling, says he’s not sure how much that country’s new status outside the EU makes a difference. “We already have EoW on all of our scrap grades over the past two years,” he says of Sackers.
Brexit notwithstanding, Dodds predicts that “UK exporters will soon face the same problem, I’m sure, [and] there will be a mad race for the EOQ criteria.
A trader at a US-based metals company said inquiries and orders from China had not declined and may even have risen slightly in November. The United States faces the same inbound quality (and in some cases tariffs) restrictions for scrap metal it sends to China, but currently lacks a framework reviewing export standards.