In the last article, we touched on the problems facing plastic and paper recyclers with China’s impending ban on recycled materials. Another facet of the recycling industry that is impacted by these changes is scrap metal recyclers. Historically, China has played a major part in the scrap metal industry, importing nearly half of the world’s copper each year- nearly 23 million tons of copper alone. With the volume of scrap metal China imports increasing each year, the loss of this massive buyer could substantially impact the industry.

 

Recent Activity

Copper: Stock prices of Copper have risen in recent days partly due to the media surrounding the ban. A call for more refined product from China has minimized the amount of usable copper, rising stock prices.

 

Steel: Heibei ( the largest steel producing province in China) to slash 35% of their current steel capacity by 2020.

 

Aluminum: All aluminum capacity is being cut by 30%, reducing output by 17% annually.

 

Why is China Invoking this Ban?

In short, China has a smog problem. You may have seen the pictures of an apocalypse-esc city, covered in a thick blanket of fog, looking like something out of an 80’s sci-fi thriller. Respected recycling author Adam Minter, who will be speaking at the Steinert Expo 2017, has written a phenomenal book on the topic and recounted his firsthand experiences with Chinese smog as “reminiscent of a solar eclipse” – and at 2:30 in the afternoon no less. Smog is a real problem in China. In one year it contributed to an estimated 90,000 deaths. After this horrendous year for air quality in China, they put a plan in place to make improvements. Many metal recovery facilities were not being regulated, some even burning rubber coated metals in open air environments with no filtration. This has since been prohibited.

How is this Affecting the U.S.?  

According to ISRI (Institute of Scrap Recycling Industries): “The scrap recycling industry is the first link in the global manufacturing supply chain. Recycled materials are key inputs into the production of new, usable commodities for the use in value-add production…and China is the recycling industry’s largest customer.” America’s biggest challenge right now is keeping their first building block in a game dominoes that will protect the entire industry from toppling over.

In the U.S. there are many companies working to recycle scrap products and renew the world’s resources. Companies such as OmniSource and Recycle West Virginia have been working to create clean scrap for years. These companies across the country have been doing the heavy lifting when it comes to recycling our country’s metals. OmniSource alone ships millions of tons of metal out to be repurposed each year and has been in business for over 60 years. Recycle West Virginia, a newer facility, is making waves in the ASR industry running 24 hours a day 5 days a week to recover the nonferrous metals from auto scrap. Scrap companies now face an uncertain future in regards to selling their commodities.

Many scrap processors have started investing in equipment upgrades like magnet feeders and conveyors, mixed metal sorting systems, ASR drying solutions, vibrating feeders, and drum grinding mills from companies like General Kinematics. One of the biggest changes that will improve scrap metal products is the investment in automated equipment to improve material purity. Purity is the most important factor to keep in mind when targeting continued exports to China.

Have a question about how to improve the purity your scrap material? Call GK and talk to a resource recovery expert today!

 

**UPDATE: New Metals to Escape the Ban**

 

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