Speaking on the sidelines of the ISRI 2018 Conference with exporters of non-ferrous and ferrous scrap, SteelOrbis has been informed of important changes in strategic decisions by scrap processing plants in China as a result of the environmental policies of the Chinese government.
As one source which asked to remain anonymous stated, “We are all still working through the effect of US import tariffs on our business model, nonferrous has been affected by the Chinese retaliatory tariffs but ferrous scrap not yet. What we do know for sure is that the environmental rules and corresponding duties established by China are not going anywhere.”
Given the environmental laws established by China, a separate firm with nonferrous processing plants in China stated, “In our case, we are going to move our plants out of China to other ASEAN countries.” They both expressed frustration and uncertainty “being felt in many Chinese manufacturing facilities” as a result of government policy changes.
Both sources reported that countries such as Indonesia, Malaysia, and others in the region are inviting the opportunity to establish new facilities in their countries and negotiations are active.
One source stated, “While in some cases their environmental standards may not be ideal locally, our objective is not to take advantage of those low standards, but we are going to establish our sites to exceed local compliance standards to global standards such as ISO9000 and others. The opportunity is a win-win for both of us.”