Tariffs, metal theft and licensing issues are among the barriers encountered by scrap traders.
Scrap generated in one place may have a willing buyer the next country over or in a nation halfway around the world, but that doesn’t mean a transaction can always be made.
A session titled “Global Trade Issues and Answers” at the 2014 Middle East Metals Recycling Conference hosted in Dubai March 2-3 allowed four presenters to provide updates to various barriers affecting international scrap trade.
Scrap trader Robert Voss of United Kingdom-based Voss International, who also is president of European recycling federation Eurometrec and chair of the International Trade Council of the Bureau of International Recycling (BIR), said recyclers in Europe are still paying for a 30-year-old mistake.
“Our American friends call it the scrap business, but an error in 1984 within the EU, when legislation in French used a word that is interchangeable as either waste or scrap” continues to affect EU (European Union) regulations, said Voss.
Beyond the ongoing effort to clarify the EU’s definition of what is waste and what isn’t, Voss pointed to protectionism as a problem that “begets imbalances of certain grades, loss of revenue and decreased recycling rates and eventually WTO (World Trade Organization) penalties.” He pointed to South Africa and Kazakhstan as two nations with anti-competitive protectionist measures in place.
Metals theft, particularly of copper, remains a problem throughout the world, although Voss pointed out that recyclers are foremost victims. “My own company has had eight containers broken into, all at the Hong Kong terminal, none with the seal being broken. There are some very sophisticated people out there—a very strong organized crime syndicate behind it [in Hong Kong]. They take two tons out of each container.”
Salam Al Sharif of United Arab Emirates-based Sharif Metals International also pointed to protectionism as a key issue. Noting there is “very strong bilateral trade between India and the GCC (Gulf Cooperation Council) nations,” he warned, “Such opportunities are being tampered with to block these trade flows [and] it’s a very sizable business volume. That business is going to grow, unless these export bans and taxes and tariffs get in the way.”
Sharif, who also is president of the Bureau of Middle East Recyclers (BMR), said that organization will play a role in addressing the issue. “I’m sure we’ll come up with something that is quite positive, but right now it does affect our business day to day. These bans defy the fundamentals of supply and demand,” Sharif said.
Presenter Dhawal Shah of India-based Metco Marketing and the Metals Recycling Association of India (MRAI) said that 400-member organization was formed in 2009 in response to proposed and enacted customs duties on imported scrap. With scrap “being an essential raw material,” according to Shah, he said MRAI has continued to vigorously “question the viability of this duty.”
On a positive note, Shah said MRAI has worked with India’s customs agency to gain recognition of the Institute of Scrap Recycling Industries Inc. (ISRI), Washington, D.C., scrap grade terminology by the agency.
“As of 2011, the entire nomenclature is accepted by Indian Customs,” Shah commented. He also listed as MRAI accomplishments the establishment of a mediation service and of pre-inspection agencies for containers.
Genny Yin of Beijing-based K&C International Consulting Co. noted that since 1999, the import of scrap materials into China annually “has increased by six times, from 9.4 million tons to 54.9 million tons.”
K&C has been set up to help scrap exporters outside of China secure their AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine) licenses. She noted that the licenses need to be renewed every three years and that as of 2013 there were 3,315 license-holders globally.
She noted that not all license holders whose licenses expired at the end of 2013 received renewals and that the total number of licenses was likely to fall below 3,000. Among those who did not earn a renewal, reasons included “missing the deadline, incorrect paperwork or being unfamiliar with the new procedure,” according to Yin.
Yin also told delegates that renewals are typically announced “in batches,” and that in 2013, 120 AQSIQ license renewals were announced in March and 198 in November.
The 2014 Middle East Metals Recycling Conference was March 2-3 at the JW Marriott Marquis in Dubai.