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Scrap dealers tighten acceptable grades for Operation Green Fence

May 08, 2013 - 16:55 GMT Location: London

KEYWORDS: operation green fence , scrap dealers , sims metal management

Major European non-ferrous scrap dealers are adjusting the specifications of the scrap they are prepared to buy from suppliers in response to China’s Operation Green Fence legislation, sources told Metal Bulletin.

"Some big merchants are already saying they have a stricter approach to contaminated material," a scrap buyer said, adding that this new approach is being solely driven by China’s renewed focus on existing waste import legislation. 

Scrap dealer Sims Metal Management has sent a letter to its suppliers, seen by Metal Bulletin, informing of changes to the allowable grading of motors and electrical cabling that it is prepared to buy.

The company will no longer accept deliveries of motors that contain household electrical waste, transformers, power supply units, fridge compressors, welding boxes, circuit boards or excessive attachments.

Neither will it accept cable that contains any plugs, circuit boards or excessive attachments.

"A strict approach will need to be taken to any contaminated/pluggy cable that is delivered," Sims wrote to its suppliers. "These directions have come directly from end-users so, while it may well cause inconvenience, regretfully we are all in the same position."

A scrap dealer told Metal Bulletin that Operation Green Fence has already had a huge effect on scrap flows, saying that more than 20 containers of cable were recently rejected at port for containing plugs.

"There is a lot of confusion. There are a lot of people talking but only a few people understanding," he said.

"People are becoming nervous of sending material to China. It’s a very good way of stopping scrap going to China, if that was their intention," he added.

The scrap dealer said that one of his own shipments had been rejected while it was still on the water, based on photographs of the material.

"We will have to get the CCIC [China Certification & Inspection Group] to check the material before shipping. It’s very costly to bring it back, and we’re hearing a lot of similar stories," he said.

But the scrap buyer said that Operation Green fence was simply China bringing itself more into line with other markets, and that it is not excessive legislating on its part.

"China is trying to produce quality metal, and is fed up with inferior grades of scrap from merchants. Stuff that was going to China before was often because it had already been refused from somewhere else," the buyer said.

"People had gotten a bit lazy with good Chinese prices [for inferior scrap], but that door is starting to close," he added.

"Scrap sorting will have to get better, and people will have to be a lot more careful about the quality of material they send out there."

Jethro Wookey
Twitter: @jethrowookey_mb

All material subject to strictly enforced copyright laws. © Euromoney Institutional Investor PLC.

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