China 'tightens screws' on scrap imports

Asia: Not least because of China's ''National Sword 2017'' initiative to counter smuggling, prices of all grades of plastic scrap are likely to remain soft over the coming weeks. A number of plastic scrap traders have withdrawn from Chinese ports where customs officials are opening all containers and ordering their return to ports of origin when any irregularity is uncovered.

Over the past three months, prime plastic prices in Asia have remained high under the support of good demand - except in the case of China. After the Chinese New Year holidays, the prime plastics market peaked but then, suddenly, demand began to ebb and prices started to fall. High prime plastic prices had helped to maintain a healthy momentum within China’s plastic scrap market.

Prices had remained high despite low demand but the trend began to reverse as a direct result of China’s announcement of the launch of a one-year ‘Customs Law Enforcement Campaign’ that took effect in February. The purpose of this initiative is to crack down on the smuggling via the country’s porous ports of ‘foreign waste’ - the Chinese term that encompasses a certain type of plastic scrap.

Known as ‘National Sword 2017’, the Chinese customs campaign is intended to impose strict curbs on the illicit movement of agricultural and resource products, as well as taxed goods, drugs, guns and other counterfeit items.

Fear of delays

The ‘foreign waste’ of particular concern to the Chinese customs authorities is solid waste, such as industrial, electronic and household waste - and, importantly for our sector, plastics waste. Under the campaign, these authorities have started to tighten the screws at ports in collaboration with a slew of other government agencies and industry associations. As China is the world’s biggest consumer of plastics scrap, this sudden clampdown has definitely slowed the global scrap market.

Numerous established plastic scrap traders have withdrawn from Chinese ports where customs officials are opening all containers and being extra-vigilant on goods movements. At the slightest hint of an irregularity, the containers are being shipped back to their port of origin. Over the coming months, this government move is likely to create a scare among scrap traders.

Recyclers are likely to reduce - or abandon altogether - imports of plastic scrap for the time being, fearing delays in the clearing of their boxes by customs officials. A majority appears wary of incurring hefty port charges on intercepted containers.

Read the full market report contributed by Surendra Borad Patawari of Gemini Corporation in #2 of Recycling International.

 



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