China’s scrap ban complicates business

March 17, 2019

NITRO, W.Va. — Last summer, China began restricting imports of eight different scrap categories — including aluminum, steel and copper as part of a move toward that country’s stated goal of banning all scrap imports, including metals, by 2020.

That has had a significant impact on scrap sellers and buyers in the U.S. because one of the bigger markets for scrap materials is shrinking under the new policy, meaning prices for those have gone down.

China was the importer of nearly half of the world’s scrap material. According to the Institute of Scrap Recycling Industries Inc., 31 percent of U.S. scrap commodity exports worth a total of $5.6 billion were sent to China last year.

So scrap yards in the United States have been left scrambling for other buyers.

An official with West Virginia Cashin Recyclables in Nitro says he remains hopeful that the relationships the company has maintained with other buyers will keep them strong in the midst of this market change.

According to Scott Clark, West Virginia Cashin controller, by September 2018 China’s scrap paper imports had dropped 23 percent and scrap metal went down by 44 percent.

Clark says he has seen a lot of change in the scrap industry since his start at the Nitro recycling facility 13 years ago.

“The swings in this industry are a lot more drastic now than they used to be. It was very stable, but business in general has gotten much more complicated,” Clark said. “Especially the scrap business. The addition of new laws and regulations have changed the entire world market, not to mention it is harder now to find buyers and sellers. Larger cities have been able to absorb a lot of the losses, but smaller towns can’t take on the financial burdens in the way that cities can.”

Clark said West Virginia Cashin has been able to stay close with both buyers and sellers to keep things running smoothly.

“This halt in exporting to China is no different than the other obstacles in selling West Virginia Cashin has come across,” he said. “With the biggest buyer of scrap out of the picture, the price for scrap has gone down. Paper and plastic aren’t worth much, but we have maintained relationships with buyers of those materials. Cardboard especially, we ship a load of cardboard out per day because we have a relationship with a mill.”

Along with the cardboard mills, West Virginia Cashin continues its good relationship with copper buyers.

“These longstanding relationships we have with various buyers are what have allowed us to weather this storm,” Clark said.

Clark says that West Virginia Cashin is looking for other buyers in the U.S., Europe and Canada, and is hoping to secure buyers in Vietnam and Malaysia to take over a greater portion of the scrap China was buying.

Clark has one piece of advice for scrappers in West Virginia: “I wouldn’t hold onto anything waiting for something tomorrow. You’re better off getting what you can get for your scrap while you can still get it.”

West Virginia Cashin is located at 1 Pickens Road in Nitro.

Follow reporter Fred Pace at Facebook.com/FredPaceHD and via Twitter @FredPaceHD.