Revised import regulations in China may mean metal recyclers may struggle to get material such as shredded metals accepted.
According to the Bureau of International Recycling president of non-ferrous Robert Stein, metal recyclers could have to find a different end market for this material if new restrictions are imposed on shredded metal. Exporters can still ship loose material to China if it is all the same material.
Stein explained to MRW that China has imposed import restrictions on all loose mixed scrap material coming into the country. China is now enforcing rules that will make overseas exporters separately package each material in a container rather than delivering it to China ports mixed and loose.
“The restrictions are not impossible for material exporters in general but problems could occur for metal recyclers when they export metals that have had to be shredded, such as material from car shredders, “ Stein said. “The metals are inherently mixed because they will have residues on them. They can’t be economically packaged and it wouldn’t be commercially viable for recyclers to export this material to China.
“The Chinese Government has verbally said that they won’t enforce it in this way but the regulations are still written to include this material. So others might interpret it to stop metal being accepted in this way.”
However, Stein believes if these rules are imposed, China would no longer be able to compete as exporters would send their material elsewhere.
It is widely speculated that the reason China has revised its import restrictions is to stop the practice of ‘smuggling’ where importers are not honest about what amounts of material is entering the country, so they can dodge import VAT. Importers have to pay more VAT on higher value metals. Furthermore, there have been rumours that loose scrap material has been used to smuggle high value items such as cars into the country.
A statement on the BIR website about China’s new regulations to stop this practice said: “It seems that when China imposes new regulations or tries to enforce current ones to remedy various situations, the unscrupulous among the importing community find a way to get around the rules… With corruption rife in so many aspects of scrap including smuggling and bribe-taking, it seems that a cancellation of VAT on scrap would resolve the issue.”