9 August 2018 by Steve Eminton

Chinese tariffs set to impact on recycling exports

Prices for recyclable materials which are still allowed into China from the UK and the rest of Europe are expected to rise in value in the short term at least, in the wake of proposed tariffs on recyclables from the United States.

The Chinese government announced yesterday (8 August) that it would impose tariffs up to 25% on a range of recyclable materials including scrap metal and waste paper from August 23. The tariffs are in reaction to tariffs imposed by American President Donald Trump, as part of an ongoing trade dispute between the two countries.

Already spot prices in the UK are said to have risen by £2-3 per tonne for used China grade cardboard as exporters look to guidance from Chinese mill buyers who are expected to have concerns about supplies for their mills.

‘Complicated’

However, the situation is complicated in that American prices for used cardboard have been lower than the UK and Europe which is unusual and one point of note is that the Chinese mills are still allowed to buy American material, albeit with a 25% tariff. At present rates this would mean paying about US$60 on a cargo worth $240 per tonne.

And, the market is still dominated by the CCIC inspections which are still slowing the flow of material into China.

The metal recycling sector within the UK primarily exports to nearer destinations than China but one metals expert said there were likely to be impacts because America is an exporter to China although it was too early to be specific. However, the leading trade body for recyclers in the United States, the Institute of Scrap Recycling Industries (ISRI), has already raised concerns.

Consternation

In a statement, ISRI said that it is “already hearing from contacts in China that the announcement has caused consternation among Chinese consumers of U.S. scrap commodities. Although these tariffs will not be levied on imports from other countries, it is our understanding that other regions may not be able to fulfill all of China’s demand. This is in line with other reports that the trade war has had an impact on the Chinese economy across many sectors.”

The organisation added that it “regrets that the trade dispute between the United States and China continues to escalate without any indication that the two governments will be negotiating an agreement on trade. There is no doubt that these tariffs will impair the already diminishing scrap exports from the United States to China.”

Commenting on the decision to impose tariffs on the recyclable materials, and other items, a spokesperson for China’s Ministry of Commerce said: “It is totally unreasonable for the United States to put domestic laws above international laws time and time again. To defend its legitimate rights and interests and the multilateral trade system, China was forced to take necessary countermeasures.”

‘Pecking order’

China also said the list of tariffs which it had prepared took into account the “interest of domestic consumers and companies”, although it is not known as yet how the paper mills will view the tariffs or where they sit in the “pecking order” of Chinese industry.

America’s Institute of Scrap Recycling Industries (ISRI), said: “ISRI is already hearing from contacts in China that the announcement has caused consternation among Chinese consumers of U.S. scrap commodities. Although these tariffs will not be levied on imports from other countries, it is our understanding that other regions may not be able to fulfill all of China’s demand. This is in line with other reports that the trade war has had an impact on the Chinese economy across many sectors.

“ISRI regrets that the trade dispute between the United States and China continues to escalate without any indication that the two governments will be negotiating an agreement on trade. There is no doubt that these tariffs will impair the already diminishing scrap exports from the United States to China.”

Tariffs
The tariff codes impacted are as follows:

  • 3915 Plastics
  • 4707 Paper
  • 7204 Ferrous
  • 7404 Copper
  • 7503 Nickel
  • 7602 Aluminium
  • 7802 Lead
  • 7902 Zinc
  • 8002 Tin
  • 8104 Other base metals
0COMMENTS

To post your comment, please login or signup.

Login Sign up
powerday_234x120_2017 t2e paper prices Sutco side banner 2018