Factbox: China to tighten restrictions on scrap metal imports from Monday

BEIJING (Reuters) - New restrictions on imports of scrap metal into China come into force on Monday, nearly two years after Beijing told the World Trade Organization it would stop accepting shipments of solid waste as part of a sweeping campaign against “foreign garbage”.

FILE PHOTO - A man stands near copper cathodes on a truck at a near Yangshan Deep Water Port, south of Shanghai March 23, 2012. REUTERS/Carlos Barria

Below is a summary of the new rules, along with details on past and future measures in China’s crackdown on scrap.

-China is restricting imports of eight further types of scrap metal from Monday July 1, including high-grade copper and aluminium scrap, known in China as ‘Category 6’, as well as types of steel scrap.

Scrap copper, which can be recycled into new metal or used as a direct-melt by fabricators making copper products, is seen as the most significant item on the latest restricted list.

-Companies that want to keep importing these items must apply for quotas from China’s environment ministry, demonstrating they have facilities to process the material in compliance with environmental protection standards.

-The ministry has so far issued around 240,000 tonnes of import quotas for copper scrap, about 54,000 tonnes for aluminium scrap and almost 15,000 tonnes for steel scrap.

-China tightened the impurity threshold on nonferrous scrap imports to 1% from March 2018; the ferrous scrap threshold was set at 0.5%.

-It banned imports of low-grade Category 7 copper scrap and 15 other types of solid waste, including scrap vessels and iron and steel slag, from the end of 2018. It also stopped giving traders scrap copper import quotas in 2018, meaning only actual users could import.

-In tandem with the crackdown, China in August 2018 imposed import tariffs of 25% on scrap material from the United States in a tit-for-tat trade row. Chinese companies are entitled to apply for waivers.

-China's policy has seen alternative scrap-processing hubs sprout up across Southeast Asia, including in Malaysia, where major smelters like Jiangxi Copper 600362.SS0358.HK are planning to invest.

-Since 2019, only 18 Chinese ports have been allowed to accept imports of solid waste, including scrap metal. Among them are ports in Tianjin and Dalian in the north; Ningbo, Qingdao and Shanghai in the east, and Guangzhou and Shenzhen in the south.

(Graphic: New restrictions on Chinese imports of scrap metal come into force -

-China will restrict a further 16 types of solid waste, including stainless steel scrap, scrap tungsten, scrap magnesium and scrap titanium from end-2019.

-China, which cut solid waste imports by over 40% in 2018, aims to reduce such shipments to zero by the end of 2020. However, the scrap industry is lobbying for a recategorisation of high-quality scrap from “solid waste” to “resource” to ensure continued supply.

Reporting by Tom Daly; Editing by Joseph Radford