CMRA 2014: Several challenges in China

China’s government continues to pledge its support for a recycling-friendly “circular economy.” Secondary nonferrous metals producers in that nation may need every ounce of that support to make it past several current challenges.

At the 2014 convention of the China Nonferrous Metals Association Recycling Metal Branch (CMRA), held in early November in Guangzhou, China, Ren Xudong of the China Nonferrous Metals Industry Association (CNIA) referred to “bottlenecks” restricting the growth of secondary metals production in China, including “bottlenecks for resource availability [and] environmental stress.”

Li Shilong, vice president of the Beijing-based CMRA, said many metals production and recycling companies “have met financing difficulties” and that “there is very slack investment in the sector” in 2014.

Shang Fushan, president of the CMRA, characterized nonferrous metals production in China in 2014 as “stable,” noting that while copper production was down by 1.05 percent in the first nine months of 2014, aluminum production increased by 4.77 percent during the period.

Nonferrous scrap is continuing to be imported into China at similar levels in 2014 as 2013, however falling prices have had an impact on trade values. Measured in dollars, the value of copper scrap imported into China in the first three quarters of 2014 was down by 11.4 percent while aluminum scrap values dropped by 6.8 percent, said Shang.

As the value of copper and aluminum has dropped, production costs in China are rising, he remarked. Shang cited increases in labor, energy, financing and environmental compliance costs as a “daunting challenge” for secondary copper and aluminum producers in China. “In terms of global competition, our cost advantages are being undermined,” stated Shang.

At the same time these processors are facing operational challenges—including container inspection and customs clearance bottlenecks at Chinese ports—nonferrous scrap recyclers and secondary metals producers are being told by the government their sector is important to the future of China.

“Society has boosted the status of the secondary nonferrous industry,” said Ren of the CNIA. Ren noted that the secondary sector accounted for 25 percent of all nonferrous metals production in China in 2011. The central government has set a goal for that percentage to increase to 40 percent by 2020. “We believe this sector has a very promising future,” stated Ren.

Shang also expressed confidence in the longer term future for nonferrous scrap recyclers and consumers. “Natural resources are declining [and] the world’s population is expanding. Nonferrous recycling is an inevitable trend,” he commented. “Recycled metals have rapidly become one of the important raw materials in China.”

The 2014 CMRA Annual Convention was at the Dongfang Hotel in Guangzhou, China, Nov. 7-9.