copper wire recycling
Even the highest grades of scrap are labeled as “waste” in a new EU trading regulation.
Photo by Recycling Today staff.

‘Waste’ terminology hits European trade with China

New EU regulation labeling even high-value secondary commodities as “waste” leaves Chinese buyers reluctant to import.

December 1, 2021

Several scrap traders contacted by Recycling Today say fears that a new European Union rule would disrupt outbound shipments from Europe are beginning to come to light. The traders say European exporters who took the proper procedural steps are still able to export to the People’s Republic of China, but buyers in that nation could still be reluctant to source from the EU.

In a Nov. 29 article, Fastmarkets AMM reports the government of China had failed to respond to a questionnaire from an EU agency. The questionnaire has been designed to allow governments to let companies in their jurisdictions opt in to receive circular commodity shipments—up to and including high-value metal grades.

A potential failing of the new EU procedure is the European Commission’s use of the word “waste” to describe circular commodities, including those with long-established value as industrial feedstock. Many buyers in China are proving reluctant to accept European scrap shipments, fearing trouble from either their own government or the EU.

The situation was predicted as early as this January by panelists in the Brussels-based Bureau of International Recycling (BIR) “The Challenge” series, who convene periodically to discuss global scrap trade issues.

At its January session, veteran trader Michael Lion referred to as yet unfinalized (but proposed) EU rules and saw “the possibility of some form of export controls.” Joining Lion in the concern was fellow panelist Murat Bayram, who works from Hamburg, Germany, for United Kingdom-based EMR Ltd. Bayram deemed what was looming “a very, very dangerous situation.”

Reached Nov. 30, Bayram says advanced knowledge of the situation has been helpful to companies such as EMR who previously applied for an End of Waste (EoW) license, “knowing that China did announce they will not allow any waste shipments coming into 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 having the EoW license, as the domestic market is competitive and one can avoid additional costs if containers are not accepted at the other side of the world, whereas loading a truck here and bringing it few kilometers to the mill is easy and fast,” he comments.

Another nonferrous trader, who is based in Asia but sources material from Europe, says his recent experiences are similar. He remarks that some buyers in China have ascertained that facilities with ISO or EOQ (European Organization for Quality) certification can still ship from Europe to China. Others, he says, are requesting scrap sent from U.K. ports.

David Dodds, CEO of Ipswich, U.K.-based Sackers Recycling, says it is uncertain how much that country’s new status outside of the EU is making a difference. “We already have EoW on all our grades of scrap for the last two years,” he says of Sackers.

Brexit notwithstanding, Dodds predicts that “U.K. exporters will face the same problem soon, I am sure, [and] there will be a mad scramble for EOQ criteria.”

A trader with a United States-based metals company says inquiries and orders from China have not reduced and might have even picked up slightly in November. The U.S. faces the same inbound quality restrictions (and in some cases tariffs) for scrap it sends to China but does not currently have a framework scrutinizing export standards.