The world needs scrap materials, but that does not mean business conditions consist solely of clear sailing. That was the message from two recycling organizations at the 2014 convention of the China Nonferrous Metals Association Recycling Metal Branch (CMRA), held in early November in Guangzhou, China.
 |
| Scott Horne, ISRI |
Scott Horne of the Institute of Scrap Recycling Industries Inc. (ISRI), Washington, noted that while the United States has experienced two straight quarters of GDP growth, one need only go back to the first quarter of 2014 to find a negative quarter for GDP growth.
Regarding global economic conditions, Horne indicated International Monetary Fund (IMF) forecasts declining GDP numbers in both the European Union and Japan for 2014 and 2015. The IMF and other forecasters continue to see China growing in the 5.5 to 7.0 percent range, however China’s purchasing managers index (PMI) for future activity has flattened considerably, Horne noted.
In the United States, Horne said the light vehicle industry has returned as an important generator and consumer of scrap metals. However, the housing market in the United States “remains bumpy at best,” he commented.
The health of the U.S. auto industry alone has not been enough to stave off the falling value of metals. At the same time, scrap processors are contending with lower steel and ferrous scrap prices, and they are also buying and selling in an environment where copper has lost 10 percent of its value in recent months.
Horne also remarked that developing nations throughout Asia are beginning to close their scrap supply deficits. He said one recent study forecasts China to be self-sufficient for red metal (copper) scrap by 2023. Other forecasts see China becoming a net exporter of ferrous scrap within the next several years as its auto industry grows and as structures built since its post-1980 economic revival begin to enter the demolition cycle.
The previous 20 years have been marked by an incredible flow of secondary commodities from the United States to China, with China purchasing $145 million of such materials in 1993 and $9 billion worth in 2013, said Horne.
Ma Hanchang, the consultant for Chinese affairs to the Bureau of International Recycling (BIR), Brussels, said the recycling industry now collects, processes and consumes about 800 million metric tons of material each year. It employs at least 1.6 million people around the world, although Ma indicated that figure is probably low in that a comprehensive employment figure from China is not available.
Ma cited trade barriers (such as high tariffs and export bans) as one of the major challenges facing recyclers, along with potential threats to free competition and global trade in the form of extended producer responsibility systems.
On a more positive note, Ma said the savings in natural resources, energy consumption and reduction in CO2 emissions means recycling has a secure place in the global economy of the future.
The 2014 CMRA Annual Convention was at the Dongfang Hotel in Guangzhou, China, Nov. 7-9.