China’s scrap import restrictions = more business for U.S. landfills

New Chinese regulations came into effect last September and they are already having an impact on US scrap and waste exports.

Scrap shipments to China have declined, following new restrictions imposed on foreign waste started to come into effect last month, according to Maersk Line, the world’s largest container carrier.

The new rules are also delaying cargo ships loaded with waste paper as they are unable to move from Hong Kong.

“While it’s too early to understand the full impact, we do see an impact on volumes of waste imports into China,” a Maersk spokeswoman told Reuters. “However we expect some measure of rebound as exporters adapt to the new regulations.”

On July 18, China notified the World Trade Organization (WTO) that it would no longer accept imports of plastic, textiles, unsorted paper, artificial fibers, and certain metals as of September and that all imports of these items would be blocked by the end of the year. (See main story on the left side of page)

Chinese authorities have also tightened requirements on waste paper to cut back on levels of contaminants, requirements that shippers find difficult to meet. In late September 26, Hapag-Lloyd, the world’s fifth largest container line, said it would stop accepting cargoes of scrap plastic and waste paper from Europe, the United States, and Asia headed for Chinese ports at the end of this year. A final decision on an outright Chinese ban on mixed waste paper is expected within a couple of weeks.

China previously allowed the imports because it created extra supplies of metals and materials in short supply for use in the domestic market. The Chinese leadership apparently wants to rely to greatest extent possible on domestic sources of scrap.

Recycling is a global industry, with 180 million tons of scrap commodities worth $86.5 billion exported globally in 2015. Ferrous, non-ferrous (copper and aluminum), and precious metals are among the most valuable and highly traded waste. Shipping these non-hazardous scraps for recovery in another country can extend the life of scarce natural resources that might otherwise end up in landfills.

Cities such as Foshan in southern China have 24/7 scrap operations where workers process scrap metals and recycle them for China’s booming construction industry.

A big question is where will the world’s exported waste go if not to China? “Trade barriers often have the same effect as squeezing one part of a balloon,” said Andrea Durkin, an adjunct fellow at the Center for Strategic and International Studies, a Washington think tank. “Trade flows clamped off in one area causes them to swell in another. If there’s demand, high-quality waste will be redirected to other countries. If not, it goes to the landfill.”