Market reaction to China’s National Sword program continues with significant fallout in global markets and significant implications for Australia. Whilst China has not banned nonferrous metal imports, buyers need government issued-import permits to bring in nonferrous metals. As of early March, the Chinese government has issued only ‘a tiny fraction’ of its normal licenses- and the tonnage of imports- from January to March fell almost 94% compared with the previous period. The Chinese government approved zero permits for insulated copper wire and small volumes of aluminium wire, motors, and other types of nonferrous metal.
The other major challenge for the industry is that even if recyclers find companies able to import nonferrous metal into China, the scrap will have to meet the country’s new technical standards for contamination that were enacted on March 1st. The new thresholds-0.5 percent prohibitives for most scrap, including insulated wire and electric motors, and 1 percent for nonferrous- are believed to be much too stringent.
According to data from the U.S. Census Bureau, 72% of all US copper scrap exports in 2017 went to China and Hong Kong. The impact in the US has seen domestic prices plummet. The real challenge now is that with supply outstripping demand what happens to the excess material?
For Australia state governments are already grappling with the impact of China’s national sword program and are fast tracking grants and initiatives that will ultimately produce better quality recycled materials.
Recycal is a wholly owned Australian company with an experienced waste management team. In conjunction with its sister company CMA Ecocycle they collaborate and work together to handle and process all types of metal recycling, recovering the valuable metals for reuse and reprocessing. The group is committed to looking at new technologies and to help Australia achieve a more optimum outcome for its metal recycling.
