BIR Global eForum: Spotlight on Trade: A time for “forbearance, understanding and patience”
BIR’s first-ever Global eForum started on June 2 with the Spotlight on Trade, which offered a timely analysis of the practical impact of the COVID-19 pandemic on the recycling industry worldwide. The Spotlight session preceded a series of online webinars (running from June 3 to June 23) focusing on each of the specific commodities covered by BIR as well as legislative developments affecting the recycling industry.
According to its moderator Michael Lion of Everwell Resources Ltd in China, the aim of the Spotlight session was to offer support to members by addressing the practical aspects and “mutual anxieties” of running businesses of all sizes in these “unprecedented times”. Mr Lion, who is also Chairman of BIR’s International Trade Council, went on to declare that “forbearance and understanding are very important at the moment” and that “patience is the watchword”, particularly in the sensitive area of dispute resolution.
“BIR actively encourages amicable settlements,” insisted the world recycling association’s President Tom Bird, who also described the current, gradual re-emergence from lockdown as “a critical time” in which cash flow would be “vitally important”.
If businesses genuinely wanted to maintain amicable relationships when disputes arose, they should take account of cultural differences and consider mediation ahead of formal arbitration, insisted Mark Sellier of China-based Global Metals Network Limited. He also stressed the differing interpretations of force majeure from one country to another. “In some jurisdictions,” he said, “COVID-19 would not be considered to be force majeure.”
From the global financial crisis of 2008, “we learned a lot about counter-party risk”, stated Mr Sellier. In common with the many businesses looking to take “a very conservative approach” to risk at present, his own company had introduced measures to reduce exposure and was looking for secure payment before relinquishing title to goods. Business conditions had been made more challenging because it was not possible to visit customers’ yards/factories or to assess such factors as stock levels; however, his business was looking to maintain regular direct contact with customers through video links.
There had been “considerable difficulties” in obtaining CCIC certification in some parts of Europe because of travel restrictions and office closures, according to Mr Sellier. As regards recovered fibre, Sébastien Ricard of Paprec in France said that no real issues had arisen with CCIC certification because relatively small volumes were currently being shipped to Asia in general. A switch in Europe from fibre “over-supply” to “over-demand” had intensified the focus on supplying more local markets.
Providing a plastics and rubber perspective, Max Craipeau of Greencore Resources Limited agreed with Mr Sellier that many multi-nationals based in the USA, Europe, Japan and South Korea were already looking to move manufacturing operations from China to other countries in the region. However, said Mr Craipeau, “you cannot switch such a huge production capacity overnight” and so the process could take “months or years”.
Having insisted that China would continue to be “a major factor” in the global marketplace as a consumer of materials, David Chiao of Uni-All Group argued that a container shortage earlier in the pandemic had now ended but that a further container equipment imbalance could emerge in another month or so as Chinese exporters were experiencing a growing shortage. Despite a drop in oil prices, freight rates had headed higher in recent months as a result of increased surcharges, he also remarked.
George Adams of SA Recycling in the USA identified the “tough” lockdown in India as the biggest overseas trade issue to emerge during the pandemic as it led to bank closures and docks being unavailable. Endorsing this assessment, Greg Schnitzer of fellow US company Schnitzer Steel Industries, Inc. added that “all markets are available today” and that the situation in India was also easing. “Hopefully, we’ve seen the worst of it and we’re coming out of this,” he said. “We’re beginning to see demand pick up.”
Joost van Kleef of Oryx Stainless BV in the Netherlands agreed that the “hard lockdown” in India - a major importer of stainless scrap - had heavily impacted the stainless steel market.
According to Thomas Papageorgiou of Greece-based Anamet SA, the main issue for the e-scrap sector had been that “the whole collection system collapsed” owing to the closure of retail shops and the suspension of many dealer operations. But while volumes in April had been “disastrous”, some improvement had been noted in May.
Textiles recyclers also relied heavily on the retail sector where closures had led to a 60-80% slump in sales of used clothing, according to Martin Böschen of Switzerland-based TEXAID * Textilverwertungs AG. Sorting plants were restarting but were not yet operating at full capacity; it would take time, he said, to work through the stocks waiting to be processed.
Mr Adams provided an insight into some of the practical aspects of running a scrap processing operation during the pandemic, including the daily regime of taking all employees’ temperatures, the closure of most locker rooms and restricting access to the cashier’s booth to one customer at a time. The mandatory wearing of face masks had been particularly important in boosting confidence among staff that they were as well-protected as possible against infection while in the workplace, he said.