BIR World Recycling Convention Week: New trade patterns among 2020 surprises

At the Non-Ferrous Division meeting of the Bureau of International Recycling (BIR), held online Thursday, Oct. 15, as part of its World Recycling Convention Week, a panel of traders portrayed conditions in many parts of the world as having been depressed in the second quarter of 2020 but rebounding considerably in the third quarter.

Within the market updates, another recurring theme involved the international shipping of nonferrous scrap grades and semifinished secondary metals in 2020 to and from nations that have not always been exporters or importers of such products.

Dhawal Shah of Mumbai-based Metco Marketing PVT Ltd. said that as India’s metals sector ramped back up in the late summer, it found “consistent homes in export markets like China and Japan” for aluminum alloy ingots that normally went toward its domestic vehicle sector.

Neighboring Pakistan also was a beneficiary of China’s early rebound from its bout with COVID-19, according to a market report Shah read from Aamir Malik of Karachi, Pakistan-based ABM Corp. Malik’s report indicated new environmental laws in China meant in 2020 “a lot of nonferrous scrap started coming to Pakistan for recycling and smelting to make ingots for the domestic as well as the international market.”

South African recyclers have long exported nonferrous scrap, but government restrictions and duties designed to keep scrap from leaving caused some changes in operations, said Sidney Lazarus of Durban, South Africa-based Non-Ferrous Metal Works Pty. Ltd. He said the restrictions made it more common for dealers to melt scrap to make “blocks and ingots” because they are now easier to export.

Nick Hinohara of Japan-based Metal Solution Provider said secondary aluminum consumers in that nation imported “almost 30,000 tons per month” of ingots from China last year. That figure dropped to 6,000 tons this July and to 10,000 tons in August.

“I think the reason for the sharp drop was that Chinese alloy became too expensive for the depressed Japanese market,” Hinohara said. China’s more expensive ingot might have been caused in part by its inability to bring in imported scrap. Some ingot makers in China reportedly even brought in ingots from other nations and then remelted them to meet domestic content laws.

As a result, Hinohara said, Japanese buyers have been “trying to shift to other suppliers,” including those in Russia, the United Arab Emirates or domestic producers. “Now Japan is less dependent on China” for secondary alloys, he commented.

Shen Dong of United States-based OmniSource Corp. said China’s 2020 quota system for scrap materials has seen it bring in about 880,000 tons of copper scrap and slightly more than 800,000 tons of aluminum scrap—figures well below those in previous years.

A new system that might come into place in 2021 could boost those numbers, but in 2020 metals producers brought in more copper cathode, aluminum ingots and other furnace-ready materials. Dong said, “Right now, on the consumers’ side, they are doing their best to source [furnace-ready] raw materials rather than processing scrap in China.”

Rick Dobkin of Shapiro Metals in the United States said the Donald J. Trump administration has initiated a sizable number of tariffs and trade restrictions, yet “our trade deficits are the worst they’ve been in 10 years.”

Regarding the U.S. presidential election, he predicted that if Trump is re-elected, the confrontational trade policies will continue, but “on steroids.” If opponent Joseph Biden wins, “We’ll probably slowly regress toward where we were, but not completely,” he predicted, saying some of the trade confrontations of the Trump administration “probably needed to happen.”

In the discussion, moderated by Natallia Zholud of Belarus-based TRM Group, many of the traders credited the recycling industry for its resiliency and urged traders and recyclers to think positively. Non-Ferrous Division President David Chiao of U.S.-based Uni-All Group said recyclers quickly learned in 2020 to “focus on adapting to the ‘new normal.’”

Shah said, “I think this recovery is owed to the resilience, the passion and the undying spirit of this industry.” He urged BIR members to “give yourself a pat on the back and continue to do what you love to do.”

Leopoldo Clemente of Italy-based LCD Trading S.R.L. commented, “We need to redouble our efforts by acting with honesty and loyalty and thinking positively,” adding that the industry had “overcome many difficulties,” including the 2008-2009 financial crisis.

Mogens Bach Christensen of Denmark-based H.J. Hansen Genvindingsindustri A/S said the Green Deal in the works in the European Union might bring with it challenges but also backs the concept that it is “important to increase the circular use of resources.” Added Christensen, “The recycling of nonferrous metals is crucial to the meeting of the targets” of the Green Deal, but said the scrap industry also needed to make it clear that “free trade of scrap metals contributes to the development of the circular economy” globally.

The BIR World Recycling Convention Week is an online event hosted by the Brussels-based organization Oct. 12-16.