Maersk to resume scrap bookings to China

Danish shipping giant AP Moller-Maersk plans to open bookings for scrap metal shipments to China for material that aligns with the nation's newly released custom codes, effective 1 November.

China's General Office of the Ministry of Ecology and Environment published new import tariff codes for high-grade aluminum, copper and brass earlier this week, which reclassified certain aluminum, copper and brass scrap material from being solid waste items set to be banned in 2021 to industrial raw materials, which will be free from import restrictions.

Maersk is planning to open booking acceptance for the new refined copper, brass and aluminum materials to align with the Chinese policy, a company spokesman told Argus, noting that its plan to accept bookings will mirror China's effective policy start date on 1 November.

Maersk, along with all other major shipping lines including Hapag-Lloyd and MSC halted all bookings and shipments of solid waste containers to China and Hong Kong with a scheduled departure date after 1 September to fully comply with the Chinese government's zero solid waste import policy set to become effective in 2021.

Maersk's move to re-open bookings for the newly re-categorized non-ferrous scrap grades is expected to pave the way for other shipping lines to follow suit, helping to eliminate what some global scrap exporters saw as one of the major hurdles in resuming scrap metal shipments to China.

Other shipping lines including MSC, CMA CGM and Hapag-Lloyd did not respond to Argus' request for comment regarding their shipping policies of scrap metal to China or declined to comment.

Liability waivers and rejection concerns

Scrap exporters noted that some key details still need to be hashed out with shipping lines before they begin making new bookings, with the chief concern being liability if a scrap metal shipment gets rejected.

Despite the government's announcements and detailed scrap import specification documents since 1 July, exporters surveyed by Argus unanimously agreed that it is unclear how aggressively the standards will be enforced.

As such, most exporters are waiting for final details to be released by shipping lines to see whether an indemnity clause, which would commit scrap suppliers to compensate the shipping line for the costs associated with a rejected load, or some similar contract or provision will be required to obtain bookings.

Maersk is still considering options to address the matter and hopes to have more insight on the customs inspection policy first before it makes a final decision, the Maersk spokesman said.

As such, some exporters who have already tried to schedule bookings this week with Maersk for scrap shipments to China have yet to receive confirmation and firm rates from the shipping line.

"We haven't received any bookings we requested for loading early November yet. Until we see confirmations; it's just words," one US exporter said.

By Brad MacAulay