Recycling Industry Cautiously Optimistic about Business Prospects

Review: BIR World Recycling Convention & Exhibition in Miami (June 1-4, 2014). (Photo: Andrea Damm  /

The Convention in Miami had attracted more than 1,200 participants from 63 countries. “A great achievement given the still very difficult market conditions,” BIR President Björn Grufman of Sweden-based Metallvärden AB told the recycling organization’s General Assembly. The Convention represented one of the key components of a dedicated effort by the Bureau of International Recycling (BIR) to open its doors to more companies in Latin America, thereby offering existing members new business opportunities and, in return, sharing their expertise in international trade and environmental legislation with those businesses from Central and South America.

A video review of 2013 confirmed that the BIR had welcomed 66 new members despite a “darker year” for most commodities – a performance which underlined that, even in difficult times, “it’s important to be part of a strong global alliance.” In 2013, “economic conditions for the recycling industry must have been the worst for many years,” stated Grufman and added: “Only time will tell what the full impact will be on Europe’s scrap industry. I can only say that I am more optimistic about the current year than the one just past.” Re-elected as BIR Treasurer in Miami, Ranjit Baxi of UK-based J&H Sales International confirmed that the world organization had enjoyed a small surplus last year. The General Assembly also provided a stage for the official launch of his book entitled “Recycling our Future”, which is intended to “raise awareness of recycling the world over”, he said.The General Assembly was preceded by a keynote address from eminent forecaster Jason Schenker, the founder and President of US-based Prestige Economics. This regular commentator for The Wall Street Journal and Bloomberg News, among others, began by predicting a three-year window of growth up to the year 2017, at which point he anticipates a modest correction in the USA and perhaps slower growth for emerging markets.

The speaker went on to reveal the results of benchmarking exercises which demonstrated a significantly more positive outlook among recycling industry respondents in Latin America when compared to their counterparts in North America. In particular, the risks presented by scrap processing margins were rated as “high” or “very high” by 82 per cent of respondents in North America as against 29 per cent in Latin America. In addition, concerns over scrap supply were found to be significantly deeper in North America than in Latin America.

“Our industry should be core actor”

Extended producer responsibility (EPR) schemes have gained significant traction in France but, in their current form, pose a number of risks for recycling companies, the BIR International Environment Council (IEC) meeting in Miami on June 3 was told by Alfred Rosales, Executive Director of French recycling federation Federec.

For the interests of the recycling industry to be protected, it needs to be “a core actor in the EPR schemes’ governance and technical expertise”, Rosales maintained. “Our position statement also calls for the recycling industry to retain the capability to sell our products. Ownership is a big issue for us. If we are not the owner of the material, we are not able to sell”. French organization Federec also wants to ensure that the period between reviews of EPR schemes is sufficiently long to encourage investment. In addition, it is recommending the establishment of an independent entity to monitor company data in order to avoid confidentiality issues.

An insight into developments in Latin America was provided by environmental lawyer Russell Fraker of US-based Beveridge & Diamond, who began his guest presentation by stating: “There has been a flood of waste laws in the last ten years or so, with EPR provisions in most of the major markets of the region”. Most of them “have not geared up on implementation”, he added, “but it’s coming – the laws are on the books and, little by little, they’re getting started”. And he also pointed out: “The majority of the market space in Latin America for electronics is under some kind of e-waste take-back regime”.

Specifically with regard to the take-back law enacted in Brazil four years ago, reverse logistics provisions have been applied to batteries, tyres, lamps, electronics and packaging. In theory, responsibility for devising the different sectoral agreement proposals lies within industry; in practice, said Fraker, the government has been taking the lead. Pointing to “significant issues and certain problems in implementation,” Fraker noted by way of example that the agreement on electronics “looks like it’s in some jeopardy of not moving forward” and “is certainly not on schedule”.

On a positive note, Fraker highlighted Brazil’s success in the past with recycling programmes; for example, the country is said to enjoy the world’s highest recovery rates for aluminium cans and pesticide packaging. Therefore, there is every possibility the electronics scheme will be “pretty successful once they get organized”, he concluded.Also at the meeting in Miami, which was chaired by Olivier François of NV Galloometal, the BIR’s Environmental & Technical Director Ross Bartley outlined latest developments at the UN-EP Basel Convention regarding the framework for the environmentally sound management (ESM) of hazardous and other waste. He expressed concern that latest work involving the Basel Convention’s Expert Working Group could result in “the bar for facilities in the industrialising countries ending up higher than what is required within the OECD” – an outcome that would have the potential to “cause some stress later on”.

How innovative criminals are

“There are eight common ways of gaining entry into a container in less than 35 seconds,” the BIR International Trade Council (ITC) meeting in Miami on June 2 was told by Ray Fernandez. While global container security has been built around the bolt seal, it can be “bypassed”, “doctored” and “manipulated” in a variety of ways, he insisted. The Vice President of US-based Sealock Security Systems supported this observation with some video footage showing “how simple it is to defeat a conventional bolt seal”. The guest speaker said “it’s really mind-boggling how innovative and precise these criminals are”, while ITC Chairman Robert Voss CBE of UK-based Voss International described the video evidence as “quite frightening”.

According to Fernandez, products such as those offered by his own company make it possible to identify where a theft “event” has occurred and to obtain recourse, while at the same time protecting the relationship between the buyer, seller and transport operator. “We’re not going to stop cargo theft – that’s impossible, we know that”, he declared. “But you can certainly take informed steps to mitigate many of these nuisance problems”.

The wide-ranging subject matter at the ITC meeting also included an acknowledgement from Tshanda Kalombo of the US Department of Commerce that the recycling industry “has a very important story to tell” but is “not that well understood,” thus leading to “unfortunate regulatory and policy approaches”. The Senior International Trade Specialist outlined how Transatlantic Trade and Investment Partnership negotiations between the USA and European Commission are intended to, where possible, eliminate tariffs and non-tariff barriers as well as to reduce those costs to businesses associated with differences in regulations and standards. In this context, she appealed to the recycling industry to come forward with information on “the issues you’re running into”.

Downward trend in Chinese scrap imports

In the final guest presentation at the ITC gathering in Miami, Bob Yang of the China Entry-Exit Inspection & Quarantine Association Reused and Recycling Branch (CIQAR) confirmed “a downward trend” in Chinese scrap imports, mainly owing to “volatility of market price and more trade difficulties”. However, he underlined that China continues to be “the biggest consumer market in the world” and one “still full of potential”.

In the first quarter of this year, China imported 10.66 million tonnes of scrap as raw material or 10.4 per cent less than the 11.9 million tonnes in the same period last year; the value of those imports fell 11.3 per cent from approaching US Dollar 7.8 billion to just under 6.9 billion. Also in the first quarter of 2014, China’s CIQ inspected 75,200 batches of imported scrap – of which 55 were rejected, the speaker pointed out.