China bolsters scrap quota after reclassification delay

China has increased its scrap metal import quotas for 2020 in the ninth tranche of such quotas issued for this year, after delaying the planned reclassification of high-grade copper, brass and aluminium scrap metal as raw material.

The new tranche is the largest issued since April. A total of 176,746t of copper scrap and 209,660t of aluminium scrap has been added to this year's allowances. This dwarfs the previous batch of quotas issued last month for just 1,570t of copper scrap and 5,840t of aluminium scrap.

The latest allocation also allows for a further 4,990t of steel scrap imports, while the previous tranche had no additional allowances for ferrous scrap imports.

Overall Chinese scrap metal import quotas for 2020 now stand at 693,659t for aluminium and 718,500t for copper, with a total of 16,530t for ferrous scrap.

In January, China approved the recategorisation of high-grade copper, brass and aluminium scrap as raw material with no import restrictions, and the new standards were scheduled to come into force on 1 July.

But the government delayed the issuing of key information to the industry regarding specifics on HS codes for scrap metal shipments under the new system. Market participants believe that China Customs will require new HS codes for shipments as the old codes were designated for specific scrap metal grades, while under the new system they will be classified as a raw material.

Once the new system is in place, scrap metal that meets the specifications will be classed as raw material and be free of import restrictions, while imports that do not meet the new criteria will be restricted and placed under the quota system introduced last year.

But China also plans to ban the import of solid waste entirely from next year. The Bureau of International Recycling (BIR) said that China's Ministry of Ecology and Environment confirmed at a conference a week ago that it will ban such imports from 2021, and will no longer accept and approve import applications for solid waste.

This will include scrap metal that does not meet the specifications to be classed as raw material, and as a result will remain classified as a waste product.

"A newly revised ‘Law on the Prevention and Control of Environmental Pollution by Solid Wastes' is announced to come into force on 1 September, clarifying the legal requirements for the identification of attributes of imported goods suspected of solid wastes," the BIR said.

By Jethro Wookey