Apr 30, 2019 ⁃ Recycling blog

The changing metal recycling landscape in China – key trends explained

Claude Lovrinovic

Sales Director APAC, Metal Recycling

Ioannis Giouvanitskas

Vice President, Metal Recycling

Metal recycling – like waste recycling – is at a turning point in China. This is due to the recent import bans and heavy import taxes, but also to the increased availability of obsolete scrap and the country’s efforts to improve its own recycling capabilities. As people continue to move to cities and the middle income increases, more minerals and metals are used for new infrastructure and commodities, and more scrap becomes available. Metal scrap is valuable raw material as it can be recycled and reused again and again.

There has been much talk about China putting a stop to waste imports in 2019. In addition to this, China has also banned imports of ferrous and non-ferrous metals, like copper and aluminum scrap, as of mid-2019. The 5-year agenda includes special targets for the development of recycling facilities, driven by economic, social and environmental reasons. What does all this mean for metal recycling in China, and where can we see the biggest impacts?

1. Metal recycling will increase

The amount of available scrap metal has increased in China and will continue to grow. Soon China will become a net exporter of scrap metal. For example, the annual sales of passenger vehicles sold in China increased from approximately 10 million to 25 million from 2009 to 2018. All these cars need to be recycled at the end of their life.

We will see an increase in the number of local collection centers and scrap processing plants. The smaller collection centers handle primary material separation and feed the bigger scrap dealers, which consolidate the scrap quantities. In these facilities, further processing takes place to bring the scrap into the form demanded by the steel mills or other users. More baling, shearing and shredding capacity will be installed, as the demand and material quantities increase.

Since 2017, the operation of small induction furnaces has been banned. This places a big requirement on developing electric arc furnaces (EAF), which rely heavily on scrap metal. As a result, and due to the higher availability of scrap, the utilization of scrap in steel making jumped from 11% in 2016 to 20% in 2018. The target for 2025 is around 30% – and even higher going forward.

2. Advanced recycling is spreading to new regions

Today, the most advanced metal scrap recycling areas are located in the eastern coastal region from Guangzhou in the south, right up to Beijing and Tianjin in northern China. However, we can see that smaller, but just as advanced, processing regions are starting to emerge in or near the metropolitan areas throughout the country, including cities like Chengdu, Chongqing, and Anshan, to name a few.

3. More focus on equipment performance

Sophisticated large-scale scrap recycling is a reasonably new industry in China. So far, the majority of recycling equipment has come from local suppliers, as the price of the equipment for lower capacity requirements, like shears and balers, is a decisive factor. As operations get bigger, more and more processors are looking for the kind of high-technology equipment that Metso supplies, to ensure higher capacity and trouble-free performance.

Scrap collection in China explained: Metal scrap like steel, copper and aluminium, is collected by small collectors who then manually separate the material. They cut longer pieces and bale the materials for easier transportation. The materials are sold to bigger consolidation centres where the scrap is further processed with shears and balers to make it more suitable for the next step. When a sufficient quantity has been accumulated it is transported to a bigger scrap processor. These scrap processors have bigger and more sophisticated scrap processing equipment, including shredder plants and compression shears. They make products according to the specifications from the steel mills so that they are suitable for direct feeding into the furnaces.

Many steel mills also have their own processing facilities - such as shredder plants and big shears. The infeed material is provided by the bigger scrap processors and is relatively clean with 90% to 95% ferrous content. This enables the steel mills to concentrate on steel making and not to worry about disposing of residues form the shredding process.

Paving the way for more efficient metal recycling

Metso has provided metal recycling solutions in China for over 20 years. Initially working through agents, we employed our first dedicated metal recycling sales person in 2005. Today, Metso’s metal recycling technology is perceived as being the market benchmark. The current bestsellers among our Chinese metal recycling customers include the Texas Shredder shredders, and the Lindemann^TM balers, which are especially suited for the automotive industry. Metal recycling business operators choose Metso because of the equipment’s reliability, high processing capability and uptime, as well as the robustness and general outstanding quality.

As recycling is changing gears in China, Metso, too, is moving ahead to better support the change by developing its own operations. This means increased customer support, more local manufacturing and development of the local supply chain so that, in addition to major equipment, we can supply complete plants, including conveyors and air systems, together with associated support structures.