In our Mirror publication last December, one of our many reporters from around the world summarized the main lessons taken from 2019 as follows: “We have learned how hard and exhausting it is to deal with uncertainty – when it seems like you could solve any problem, if only you knew what it was exactly.”
Whether it was the US/China trade war, China’s import controls, Brexit or the changing regulatory landscape among emerging markets, our industry found itself trying to conduct its normal, established business activities amid a squall of uncertainty, not knowing – and powerless to control – what might happen next.
The only absolute certainty about 2020 is that it will be another year of change. And regarding China, this change is likely to be tumultuous given that, several years ago now, the government identified 2020 as the year in which solid waste imports would be phased out completely. To this ultimate end, China’s import quotas continued to dwindle throughout the course of 2019.
However, there has been some more encouraging news from this quarter. The Chinese authorities have been laying the foundations of a new classification system to ensure its industry can continue to source overseas volumes of the high-quality scrap it needs. Thus, recycled brass, copper and aluminium meeting standard requirements will be treated under the import management system applying to general raw materials.
As emphasized at our meeting in Budapest last October, the changes brought about by China’s new import policy are irrevocable. Guest speaker Perrine Faye of Fastmarkets insisted that the shift in scrap flows away from China was far from temporary – most notably on the copper side – because of the level of processing capacity investment already made elsewhere in the world. For those among us still harbouring hopes that the world will return to the days when China accepted everything on offer, our own board member Murat Bayram of European Metal Recycling left no doubt when saying in Budapest: “There is no way back.”
It would also be true to say that emerging markets for our scrap are replacing traditional Chinese outlets more slowly than expected, partly because governments in South Asia and South East Asia are facing their own challenges in regulating the growing number of small scrap processing facilities setting up locally. Eric Tan of Malaysia-based SDM Specialty Chemicals Sdn Bhd told our meeting in Singapore last May about how much more scrap had been entering his country following the change in China’s import policy, adding that there was still significant confusion surrounding the hazardous or non-hazardous status of some of the unfamiliar types.
In effect, we are currently in a period of transition. But as large firms of an established scrap pedigree widen their presence in the region, there must be the hope that this transition will be relatively smooth. There are growing markets for scrap outside of Asia too: at our Budapest Convention, for example, Andriy Putilov of Ukraine-based MZ Ltd explained how his own country was looking to create favourable conditions for the domestic recycling industry and for overseas suppliers of scrap.
Despite such positives, we must approach 2020 with a degree of caution – and for some very good reasons. Although progress has been made in US/China trade negotiations, a shadow will continue to be cast over the world’s economies and markets until the dispute is fully resolved. Also, 3.1 million units were wiped off global car sales in 2019 – a larger drop than in 2008 – and the current year is also expected to be difficult for this major scrap consumer. Furthermore, we have to contend with the consequences of the US dollar becoming ever stronger in 2019.
Amid all of these negative macro developments, primary metal prices have been heading generally higher whereas many forms of scrap have been charting an opposite course. At a time when the world is looking to more environmentally sound solutions to its soaring resource consumption, such a trend seems counter-intuitive to the point of bizarre.
In Singapore, Thomas McMahon of Dillon Gage Asia stressed how metals recycling was responsible for conserving natural resources and reducing greenhouse gas emissions in a world where industrial pollution kills millions of people every year. So as recyclers, we are most definitely in the right place at the right time. It is just that the world’s policy-makers are slow to reflect the monumental importance of our activities to the well-being of our planet.
“The only absolute certainty about 2020 is that it will be another year of change.”
The most commonly used non-ferrous metals are aluminium, copper, lead, zinc, nickel, titanium, cobalt, chromium and precious metals. Millions of tonnes of non-ferrous scrap are recovered annually and used by smelters, refiners, ingot makers, foundries and other manufacturers. Secondary materials are essential to the industry’s survival because even new metals often require the combined use of recycled materials.
According to several estimates, the recycled non-ferrous metals market as a whole was worth more than US$ 90 billion in 2018.
Aluminium, which is the most abundant metal in the Earth’s crust, is one of the most recycled materials. Recovering aluminium for recycling is not only economically viable, but energy efficient and ecologically sound.
Owing to the limited availability of non-ferrous metals, the unrestricted flow of scrap from country to country according to industrial and consumer demand is crucial. BIR has consistently campaigned for the free movement of secondary raw materials to avoid shortages in certain geographical areas and surpluses in others. Import barriers could limit the supply to the manufacturing industry in some countries.
BIR’s major study entitled “Review of Global Non-Ferrous Scrap Flows” focuses on copper and aluminium. Owing to the industrial importance of both metals, there are very few countries in the world which do not trade in aluminium scrap or in copper/copper alloy scrap. The research reveals that scrap usage for copper - both for secondary refined copper production and direct use of scrap - increased worldwide by 41% from 5.9 million tonnes in 2000 to 8.3 million tonnes in 2015 (worth around US$ 46 billion at that time). Production of aluminium from scrap increased by 86% from 8.4 million tonnes in 2000 to 15.6 million tonnes in 2015 (worth around US$ 26 billion at that time).
Aluminium has enormous recycling potential and is often reused for the same application for which it was originally manufactured. Its strength, flexibility and light weight make it ideal for:
After silver, copper has the best electrical conductivity of all the elements. It is also a very good thermal conductor and is readily alloyed with other metals like lead, tin and zinc for foundry applications to produce, among other goods, products for the transmission of water such as valves.
Other common applications for recovered copper include:
The vast majority of recycled lead is used in batteries. Other applications include:
Zinc is present in everyday life in the form of coins. However, it also has other important uses:
Apart from precious metals, tin is one of the most expensive non-ferrous metals. Hence, recycling from secondary materials is very important. Its varied applications include: