B.L. Duke Named Finalist for Fastmarkets AMM Awards

B.L. Duke is pleased to announce that they have once again been named a finalist for Fastmarkets AMM Awards for Steel Excellence in the Scrap Metal Company of the Year category. This is the second consecutive year that B.L. Duke has been named a finalist.

Adding to B.L. Duke’s 2019 success’, we were recently named one of Crain’s Fastest Growing Companies for the 4th time!  Every year, Crain’s compiles a list that recognizes Chicago-area companies for significant growth over a five-year period.  B.L. Duke has made the list in 2015, 2017, 2018, and now 2019.  This year, we were ranked number 24 out of 50 companies.  Since last year, we have increased our yearly revenue by 34% and have added over 10 new employees to our team.  We are extremely proud of all our accomplishments and growth over the last year. Lastly, we are grateful for our team for their hard work and dedication to making B.L. Duke a bigger and better company year after year. 

2018 Fastmarkets AMM Finalist
2018 Fastmarkets AMM Finalist

“From officially launching our new stevedoring and storage division, B.L. Duke River Transport, to investing in technology and equipment that’s elevated how we do business, 2018 was another game-changing year for our company,” said Lou Plucinski, President & CEO of B.L. Duke. “I’m personally very proud of our team and all the work they’ve put forth that’s helped us gain this recognition.”

Every year, Fastmarkets recognizes the highest achieving companies for world-class innovation in steel and related industries. The finalists for 2018 span across 13 categories including flat steel and tube and pipe producers, raw materials providers and recyclers, as well as purveyors of financial and legal services critical to the industry, among others. Winners across all categories will be announced on June 18, 2019 in New York City.

Chicago Scrap Metal Recycling

“Firms that are finalists embody best-in-class practices as measured by global standards. This year’s outstanding finalists demonstrate that innovation and initiative are powering the industry’s strength and resiliency,” Fastmarkets’ CEO Raju Daswani said in a press release.

2018 was a continued year of growth and expansion for B.L. Duke, also named one of Crain’s Fast Fifty for the second year in a row. In addition to this recognition, B.L. Duke launched B.L. Duke River Transport on a 30.5-acre property with a 250,000 square foot warehouse, added a second peddler buy back, re-invested in new equipment, implemented groundbreaking new technology to serve their customers, and added 33 new team members, including an active member of the Air Force Reserves. They also donated time and money to local charities.

“We’re honored to be nominated among many important players in our industry and look forward to even more innovation and growth in 2019 and beyond,” said Plucinski.

For more information, contact Shannon Collins, at scollins@blduke.com or visit blduke.com.

Would you be interested in locking in your scrap price for anywhere from one to twelve months in the future? If so, B.L. Duke can now offer you a fixed price with customizable terms. No more waiting month to month to find out what you are going to get for your material.

We can offer these fixed prices through the utilization of scrap futures to hedge the risk. A hedge is an investment that reduces the risk of adverse price movements to a specific asset. In this case, that asset is your scrap metal. Whether you have a project on the horizon where you will be producing an abnormal amount of scrap or you produce a steady amount of scrap per month, we can help reduce scrap market risk by selling futures contracts for the months you expect to sell us the material.

How does it work? We enter into a written agreement whereas you agree to sell B.L. Duke a committed number of tons per month for an agreed upon period and B.L. Duke agrees to pay a fixed dollar amount for that period, regardless of market conditions. Think of this as an insurance policy on your scrap metal revenue for the agreed upon period. This will allow you to forecast your scrap revenue over a given period without the worry of markets going down. The fixed price would be established on the day that you committed to it as we will be utilizing futures markets to allow us to provide this fixed price to you. In order to make it worthwhile for both parties, we suggest that the tonnage covered by this agreement be a minimum of 1,000 tons over the period of the contract.

“Hedging scrap market risk by utilizing scrap futures is an innovative way that can help mitigate exposure to the scrap market in 2019,” says Lou Plucinski, President of B.L. Duke.  At the November 2018 Fastmarkets AMM Conference in Rosemont, ferrous scrap futures were a key topic along with freight rates, the zorba market and the automotive outlook for 2019.  According to an article posted on the AMM website, Five things we learned in Chicago, the Section 232 tariffs have heightened volatility and uncertainty in 2018, which have increased the need for better price risk management tools.

Contact your B.L. Duke buyer today to set up a time to discuss your recycling program and how we can lock in a scrap price free from fluctuations. Follow B.L. Duke on Twitter, Facebook and Instagram for news and market updates in the steel and scrap metals industry.

There are always many topics of interest we focus on in the Scrap Metal Industry; China, tariffs, scrap exports to Turkey, logistics, ferrous scrap futures to name a few. To stay up to date on all relevant scrap metal subjects our team recently attended the Fastmarkets AMM 12th Annual Scrap Steel Conference in Rosemont, IL.

“A Decade Later: What Has Changed and What Hasn’t (Yet)”

The conference began with an insightful address from Tamara Lundgen, CEO, Schnitzer Steel Industries. Tamara discussed what has changed and what hasn’t changed in our industry over the last 10 years. One of the most notable and positive changes is the level of transparency Fastmarkets AMM has brought to our industry with daily news articles, pricing updates, and more. Ten years ago, we also had a Republican President in office.  George W. Bush was in his second term.  The 2008 Great Recession hit and GDP fell 2.5 percent lower than the year prior. Scrap prices hit a record high in July of 2008.  No. 1 Busheling was selling for over $800/gt though it soon plummeted to less than $150/gt four short months later.    July was also the peak of the 2018 market with No. Busheling selling for $405/gt – less than half of 2008’s peak. According to the Fastmarkets AMM, over the past decade, there have been significant fluctuations in the gap between finished product and scrap.   The spread increased annually from $262.84/gt in 2015 to $408.70/gt so far for 2018 after a spread of $630.47/gt earlier in July. Further changes show the number of job openings in manufacturing climbed to 482,000 in June of 2018 which is the highest level in 17 years.  In 2008 job openings in manufacturing topped at 290,000. While China is still as a ubiquitous of a topic as it was in 2008, the conversations have included their “Green Fence” initiative that launched in 2013 and the introduction of their “Big Ban” to the World Trade Organization which resulted in a huge decline on imported scrap into China. Moving forward, in 2011, USA scrap exports peaked at 24 Million Tonnes. However, in the following four years scrap prices fell 40%. For those who suffered through 2015, we don’t want to experience that pain again. Many experts agree that this is the ‘top of the roller coaster’ and we should prepare to experience a decline in scrap prices and possibly a recession in early 2020.

“Presidential Debate: Section 232 and trade wars”

Tariffs. At the Fastmarkets AMM Conference, Donald Cameron, Morris, Manning and Martin LLP, Samir Kapadia, The Vogel Group, and Roger Schagrin, Schagrin Associates discussed Section 232 and trader wars. The consensus among the panelists and most peers is that Section 232 was necessary and has positively affected the metals industry and our economy even though it was truly designed to be in favor of steelmakers and not scrap metal recycling companies. This left the lingering question, if a tariff is being placed on steel imports, why not scrap imports as well?

“Turkey’s procurement of raw materials for steelmaking”

Again, China was always the number one country we followed for scrap exports, but as of more recent years, Turkey has come into the spotlight. Turkey’s largest scrap metal importer is the European Union with the United States of America coming in second place. Ismail Kursad Korkmaz, Oyak Mining Metallurgy Group, spoke in regards to Turkey’s procurement of raw materials for steel making and admitted that Turkey prefers to buy from the USA because our scrap is better quality than the EU’s. They’re mostly in the market for shred and HMS and are very dependent on scrap metal and/or steel billets as all of their mills are EAF.

“Road, rail and rivers: what is needed and what can be provided?”

Logistics are an integral and expensive part of any supply chain and since the new Federal DOT Regulations went into effect in 2018, it has been at the forefront of everyone’s minds. Drivers and trucks are in high demand and very short supply causing a surge in pricing and an urgency to find alternative modes of transportation like rail and barge as this trend is unlikely to end. Most speakers and attendees agree that though rail can provide for this need, it is a difficult task to get in contact with most of the Class 1 railroad companies. On the other hand, those companies with barge access have a huge advantage. Consumers utilizing the water with a barge can save up to 50% on transportation costs. At B.L. Duke and B.L. Duke River Transport, we can not only send our scrap metal to the steel mills by barge, but we can also bring up raw material to the Chicagoland area, store and deliver it final mile to customers.  Barge is a reliable and cost-efficient alternative.

“Ferrous scrap futures”

Speaking of the future, B.L. Duke is one of the first scrap companies in the Chicagoland area to offer future contracts to our customers. While raw material has been bought and sold on the futures markets for a long time only very recently contracts have created for scrap futures! There are currently contracts up to hedge No. 1 Busheling and Shred. Similar to service centers, scrap companies are now able to lock in scrap selling prices one to twelve months into the future. Final Thoughts: One thing that hasn’t changed in the past 140 years let alone in the past ten is that scrap metal recycling is an inherent link in the economy.  Metal is in our phones, cars, houses, hospitals, and infrastructure. In just about every day to day item we need or service we require it has been formed by, built with, transported on or stored in metal. Recycling these metals once they are obsolete is a necessary, not an option in order to keep our planet moving forward. For more information in regard to the scrap metal industry, please contact us at info@blduke.com

Summer 2018 has been extremely busy with the opening of our NEW stevedoring and storage subsidiary, B.L. Duke River Terminal (BLDRT). Located on the Des Plaines river adjacent to our Joliet processing facility, BLDRT took over the Gerdau Rolling Mill, adding 250,000 sqft of indoor storage and 30.5 acres with barge and rail access.  The US river system is surprisingly vast.  Barge freight can extend from the East and Gulf coats as far west as Omaha and north to Minnesota and the great lakes.  While the term stevedoring may sound unfamiliar, it has been around for hundreds of years; longshoreman, dockhand and dockworker are all phrases used to describe the loading and unloading of water vehicles. BLDRT will backhaul scrap barges with finished steel product from the mills direct to consumers in the Chicagoland area.

B.L. Duke River Transport offers customers an alternative cost savings transportation method during this difficult logistics climate. In a recent article published by the Daily Herald, the trucking industry has fallen on unprecedented times due to “added regulations, fewer driver hours and even fewer new drivers entering an already depleted industry.” This has caused an almost 40% surge in rates from last year. Utilizing the river system is significantly cheaper, up to four times less expensive, than standard trucking routes (see image). The availability of a facility on the river and the market’s demand of a pricing solution to the rising costs of the trucking industry have positioned BLDRT as an efficient transportation partner.

“BLDRT has the unique opportunity to bridge our mill relationships to service centers and manufactures,” states Kathleen Grady, VP of Business Development.  “Our customers will no longer need to buy barge load quantities to take advantage of the significant cost saving that river freight offers.”  B.L. Duke River Transport has heavy lifting capacity up to 500,000 lbs. and can ship directly to your facility via rail or truck from our convenient location off of I-80, I-355 and I-55. For JIT inventory programs, outdoor and indoor storage is available with climate controlled space coming this winter.

At B.L. Duke, we are always looking for ways to better service our customers whether it’s through technology, communicating industry knowledge or passing along cost saving practices, we continuously strive to revolutionize the scrap metal industry.

B.L. Duke River Transport is Innovation on the Move – call or email us today to find out more: 815-714-8900 or info@blduketerminal.com.

We’re more than excited to announce B.L. Duke was recognized as one of Crain’s Fast Fifty Companies for 2018! Each year, Crain’s releases its Fast Fifty list, which recognizes Chicago-area companies that have shown significant growth over a five-year period.  This is the second time we’ve made this list; with the first time being in 2015 for growing nearly 300 percent in five years.  Between 2013 and 2017 we’ve grown over 400%!  In 2017, we increased sales revenue by 65% and added 32 employees to our workforce.

We’ve had so many exciting happenings in the last year, it’s hard to keep up.  This year we were also named a finalist for the 2018 American Metal Market’s Steel Excellence Awards in the Scrap Metal Company of the Year category. In addition, we recently completed plans to double our footprint with the acquisition of the Gerdau Rolling Mill next to our Joliet campus, which will allow us to plan for additional products and services that will pass on even more cost-savings and conveniences to our customers. Check out our NEW division B.L. Duke River Terminal, which offers stevedoring and indoor/outdoor storage services for your finished steel product. With our prime location on the Des Plaines River in the Chicagoland area, BLDRT provides cost-saving transportation efficiencies through transloading to rail or truck direct to your facility.  On July 30th, we also announced the Grand Opening of our over the scale business in Joliet and are now open to the public.

Lou Plucinski, President & CEO

“It’s truly an honor to be named among the impressive list of honorees across many thriving industries,” said B.L. Duke President & CEO Lou Plucinski. “Hands down, this recognition is the direct result of the hard work of our team. I couldn’t be more proud of what we’ve accomplished together as a company in the past few years.”

For more information or a list of services you can check out our website at www.BLDUKE.com or call 773-778-3000 and ask to speak to a sales team member.

We couldn’t be more excited to announce the launch of our new wholly owned subsidiary, B.L. Duke River Terminal. Our new division will focus on stevedoring services with both indoor and outdoor storage. It gives us the ability to transload finished steel product, including coils, bar stock, rebar, wire, and structural steel, to rail or truck from barges coming from mills along the river systems and imports. According to this week’s AMM article, B.L. Duke adds steel terminal services, with trucking rates and availability becoming increasingly inhibitive, B.L. Duke will continue to grow it’s barge and rail services not only as a means to control our own logistics costs but now as a diversification strategy and new revenue source.

“We’re always looking for new ways to strengthen our services and improve cost-savings for our customers,” said Lou Plucinski, B.L. Duke’s President & CEO. “This expansion allows us to help link mills with our customers and suppliers and illustrates just one more way we’re revolutionizing the recycling industry.”

B.L. Duke River Transport will be housed on our recently acquired site of the former Gerdau Rolling Mill property at 1 Industry Avenue, Joliet, Illinois. The property is conveniently located adjacent to our Scrap Metal processing facility in Joliet, equipped with barge and rail terminals. With 30.5 acres and a 250,000 square foot warehouse, this will nearly double our footprint to almost 64 acres. The new location is significantly closer to Chicagoland’s industrial areas compared to Indiana ports. In addition, the new site is in close proximity to several major highways and rail terminals, including I-55, I-80, and I-355.

“With trucking rates and availability becoming increasingly inhibitive, we will continue to grow our barge and rail services not only as a means to control our own logistics costs but now as a diversification strategy and new revenue source,” said Plucinski.

The new division comes after our continued growth and success in 2017. Last year, we increased our sales revenue by 65% and added 32 employees to our team. We were even named a finalist for the 2018 American Metal Market’s Steel Excellence Award in the Scrap Company of the Year category!

“You can bet that we have even more plans in store for 2018. We’re excited to expand our scrap-metal processing capabilities and strengthen our relationships with both mills and our customer base,” said Plucinski.

Contact us today at info@blduketerminal.com to find out how B.L. Duke River Transport can help transload and store your finished goods!

We here at B.L. Duke are pleased to announce that we have been named a finalist for the 2018 American Metal Market’s Steel Excellence Awards in the Scrap Metal Company of the Year category. Winners will be announced on June 26, 2018 at The Edison Ballroom in New York City, New York.

“We’ve worked hard over the years to deliver outstanding customer service and revolutionize the scrap metal recycling business,” said our President & CEO, Lou Plucinski. “It’s an honor to be named a finalist among so many great companies in the industry.”

Every year, American Metal Market recognizes the highest achieving companies in the steel industry for innovation and initiative across multiple categories. This year’s finalists total 53 companies across 15 categories. Finalists were selected by senior American Metal Market editors, and those entries will be scored by steel industry veterans who serve as judges to select the winners. B.L. Duke is the only finalist from the Chicago-land area. Other finalists in the Scrap Metal Company of the Year category include Ferrous Processing & Trading Company, Liberty Iron & Metal Inc, PSC Metals, Schnitzer Steel Industries Inc, Sims Brothers Recycling, Triple M Metal LP, and W Silver Recycling Inc.

“We have big plans in store for 2018,” states Marissa Plucinski, VP of Sales. “They include innovative technology and additional scrap processing capabilities that deliver excellent customer service and unbeatable pricing.”

This recognition comes after a year of continued innovation and growth for us. In 2017, we increased sales revenue by 65% and added 32 employees to our workforce. In addition, we recently completed plans to double our footprint with the acquisition of the Gerdau Rolling Mill next to our Joliet campus, which will allow us to plan for additional products and services that will pass on even more cost-savings and conveniences to our customers.

For more information or a list of services you can check out our website at www.BLDUKE.com or call 773-778-3000 and ask to speak to a sales team member.

2018 Economic Outlook

I attended the Precision Metalforming Association’s(PMA) 2018 Economic Outlook presentation by William A. Strauss on February 23, 2018. William is a Senior Economist and Economic Advisor at the Federal Reserve Bank of Chicago.

It is worth it to note that this presentation was delivered before the Section 232 announcement of tariffs on steel and aluminum imports to the United States on March 1st, 2018 by President Donald Trump. These tariffs between 10% and 25% could have a significant impact on the forecasted projections.

In 2017, the United States Real Gross Domestic Product(GDP) expanded by 2.5%. The Midwest economy is growing above trend in-line with the national economy. The Federal Open Market Committee (FOMC) is predicting the GDP to grow just above trend in 2018 and then with trend in 2019 & 2020. With the GDP expanding we saw the real value of the stock market reaching new highs.

While we are seeing the expanding GDP and stock market highs, we are also seeing a restrained recovery path of the Business Cycle compared to previous deep recessions. Recovery from both the 1974-75 and 1982-82 recessions saw an average annualized growth of 4.3%, while we are currently seeing an average annualized growth of 2.2%. Even with a lower average of annualized growth compared to previous deep recessions we are still seeing a low probability of a recession within the next two quarters. A growing GDP is an important indicator for the steel makers. An expanding GDP is illustrating a positive demand for the automotive industry, energy sectors and construction industry.

Source: William Strauss – Federal Reserve Bank of Chicago

The Composite Index of the 10 Leading Economic Indicators continue to rise. The leading economic indicators usually change before the economy as a whole changes. They are therefore used as a short-term predictor of the economy. For example, S&P 500 Stock Index returns are a leading indicator. We will see the stock market rise before we see the economy recover from a slump and vice versa. Another leading indicator is Manufacturing and Trade Inventories and Sales which is a primary source of information on the state of business inventories & sales.

The United States employment increased by over 2.1 million jobs over the past year while the nation’s unemployment rate has fallen to 4.1%. With the increase of employment and the falling unemployment rate we are still seeing a significant number of unemployed Americans for more than 27 weeks. Illinois ranked below the United States as whole? Or compared to other states? as well as Iowa, Michigan, Wisconsin and Indiana in regards total employment change from the year prior. Illinois’ unemployment rate is .7% above the national rate. Wages and benefit costs continue to increase at a very slow rate. Slow productivity growth helps explain why even though we have seen a relatively strong employment increase we are not seeing that translate to higher wages.

When analyzing the inflation rate, the FOMC finds that the core personal consumption expenditures(PCE) inflation rate remains low. Core PCE inflation is when volatile components such as food and energy are removed. The FOMC predicts that the core personal consumption expenditure inflation rate will be around it’s target of 2%.

Housing Market Outlook

As for housing, the Blue Chip Housing Starts forecast calls for a continuation of the gradual recovery in housing. The 2017 actual figure was 1,207,000 housing starts in 2017. They are forecasting 2018 to have 1,279,000 housing starts and 2019 to see 1,328,000 housing starts. Housing starts are the beginning of construction on a new house and is used as an economic indicator. Structural steel will see a rise when we see a rise in housing starts.

We are seeing manufacturing output increase after being stagnant the past couple years. As manufacturing output is increasing we are still seeing capacity utilization (manufacturing) stay below full capacity, though moving higher the past year. These trends have led manufacturing employment to increase by 186,000 workers over the past 12 months. The Midwest Economy Index’s manufacturing component is above trend and performing well above that of the nation. This is leading to manufacturing job growth in the Midwest performing above the US.

Vehicle Sales on the Economic Outlook

Light vehicle sales saw record numbers in 2016 but in 2017 we saw a slight dip of 1.4%. Continuing with the trend we saw light truck sales increase by 5% and passenger car sales were 11.4% lower. Alternative power vehicles, including hybrids, hold a very low market share of total sales. Blue Chip Light-Vehicle Sales are forecasting lower. 2017 saw 17,100,000 sales and 2018 is forecasting 17,000,000 with 2019 projecting 16,700,000 sales. US Aluminum foundry alloy premiums rely heavily on demand of the US automotive industry. The premiums started to slow at the beginning of 2018 but demand from large automakers is said to be sustaining the market. Aluminum sheet capacity is poised to grow in 2018.

The industrial sector saw strong output growth over the past several months. We are seeing supply managers’ composite index grow vastly over the past year. Chicago saw a significant reporting increase over the national average. While industrial production is forecast to improve it is likely to improve below it’s historical rate this year.

The Federal Reserve has raised the Federal Funds rate by 1.25% since December 2015. The Federal Reserve’s balance sheet has been flat for the past several years but the Fed began to reduce it in October of 2017. Reducing the balance sheet is considered, “Policy Normalization”. We can expect to see the Fed rate rise to ‘normal levels’ while security holdings are sold off the balance sheet. This is a sign of the Federal Reserve believing in the strength of the US economy since it slashed interest rates to almost 0% in 2008-2009.

Head to www.BLDUKE.com for a list of services, a quote or to schedule a pick up. Follow B.L. Duke on Twitter, Facebook and Instagram for news and market updates in the steel and scrap metals industry.

At this time last year, we had a lot to be optimistic about. In 2017, the market rebounded moderately with continued growth after a tough 2016 market.  Now, we are a couple months into the new year  and are predicting a bright 2018 outlook for the scrap metal industry.  Markets kicked off with a generous increase of $30/gt for cuts and $20/gt for primes.  We saw a little sneak preview of a similar boost back in December.  As history shows, January typically tends to be a strong month, while February falls flat.  However, buyers, sellers, and brokers are particularly bullish.

Towards the end of 2017,  Nucor’s DRI (direct-reduced iron) plant in St. James, Louisiana was forced to halt production due to an unforeseen outage.  This forced Nucor to consume more scrap than expected, driving ferrous scrap prices upward.  Recent inclement weather is another reason to give confidence in a forecasted increase.  The Midwest and East Coast were stricken with tough winter conditions within the last month.  Considerable amounts of snow and frigid temperatures made for logistical disasters and a slowdown of operations.  Supplies are low, driving for high demand. According to ISRI (Institute of Scrap Recycling), other factors adding to  an uplifting market are potential trade remedies from Section 232 steel investigation and other trade cases, steel production cutbacks in China, recovering iron ore prices, healthy domestic order books, and the new corporate tax cuts.

2018 scrap metal outlook

Heading into the new year, the biggest concern in the scrap industry seems to be China’s ban on scrap imports.  Mid 2017, China caused an uproar by announcing their plans to the World Trade Organization (WTO) to tighten their threshold of impurities on scrap imports, unlike the rest of the world that follows the global standard.  “ISRI is very disappointed to see the Chinese government finalizing its Environmental Protection Control Standards and failing to take the opportunity to bring them in line with global standards that reflect manufacturing requirements and are utilized by environmentally responsible recycling operations in the US and around the world,” ISRI president Robin Wiener said in a statement.  There are still many questions and doubt heading into the new year regarding the ban.  Learn more about China’s ban on our last blog post.

The Midwest Chicago market saw another change recently when the January AMM was released with “Historical” and “Expanded” pricing.  The change was put in place to start including 3 Indiana mills and an Iowa mill to justify logistical differences.  Both numbers will be released for the next 6 months, then will be down to one “expanded” category come June 30, 2018.  The new category will be listed the way it always has been, as “Chicago“.  Though expanded prices are showing higher right now, we believe sooner rather than later the prices will end up aligning, before the 6 month period is over.


“All of the fundamentals are in place to ensure a strong half of 2018!  Additionally, with hot band futures pushing north of $740,  it will be difficult for mills to justify pushing the scrap market down.”

What are your thoughts on the 2018 steel market? Comment below!

China bans scrap metal

What Now, China?

Recently there has been uproar in the recycling industry and to be candid, we didn’t think this news would have such an effect on the Scrap Metal Industry.  In July, China proposed a new ban at the World Trade Organization (WTO).  Although the ban hasn’t gone into affect, the world is experiencing some significant disruptions. How will this impact the global economy and most importantly, what will it do to the Metals Industry?

What is the “Big Ban”?

According to The Institute of Scrap Metal Recycling Industries (ISRI), there are two important parts to this ban. First and foremost, the proposed ban limits or prohibits 24 different imported materials into China. Most are solid waste, such as paper, plastics, slag, waste wool, ash, cotton, and yarn. The second part of the ban includes a “carried waste” threshold, and this is the part the Metals Industry needs to pay close attention to. China’s proposed draft of the ban includes a 0.03% “carried waste” threshold on all imports into the country. Carried threshold meaning the contaminants and prohibitive materials that are commonly mixed in with recyclables, including scrap metal. Currently, the global standard is 0.05-5.0%.  The ban also mentions a proposed 80% weight requirement on all metal and electrical appliance scrap and the current global standard is a 50% threshold.

scrap metal recycling ban

Why The Ban?

According to China, the ban and the proposed carried waste threshold are in efforts to replace foreign materials with domestically generated material. China claims they want to reform their import system to protect the health of their citizens and environmental interests. To date, Chinese authorities have yet to divulge any specific details.  Many exporters are uncertain whether the ban includes their materials, such as certain plastics, slag, mixed paper.

After the announcement, the WTO requested China release more specific details. In response, China’s Ministry of Environmental Protection has released a draft of changes of some technical specifications. For imported scrap, stricter regulations on impurities, weight requirements for metal and electrical appliance scraps. However, many unanswered questions remain.

metal recycling industry

Recycling Industry – USA

For non-metallics, China’s ban on paper and plastic would affect 18% or $532 million of USA scrap. The scrap trade to China is worth $6.5 billion annually and impacts 150,000 US jobs. Currently, 40% of the USA’s total exported scrap goes to China. The plan would essentially affect all mixed metals, especially scrap products that must be dismantled, such as cable, scrap wires and scrap motors. With that said, the paper, plastics and copper industries have already been experiencing disruptions in their day to day operations for some time now. Although the ban hasn’t gone into effect, Chinese importers report having trouble securing permits.

According to one of B.L. Duke’s copper consumers, “The Chinese’s recycling restrictions have created complete chaos!  We currently have 500 containers stuck in a port held up by Chinese Customs.”  

China accounts for more than half of the world’s total scrap imports and this ban won’t only affect the United States economy but the world economy.


ISRI to the Rescue?

After China’s vague announcement at the WTO, ISRI immediately spoke up and voiced their concerns. ISRI has urged China to specify the difference between the term “waste” and “scrap”.

“ISRI is extremely concerned with the reduction of the control requirement for ‘carried waste’ to 0.3% for all commodities,” wrote ISRI President Robin Wiener in the letter. “The application of this standard will effectively result in a ban on the importation of all these commodities. It is simply not possible to achieve such a control level, nor is it possible to even measure it with such accuracy.”

“In the United States, a 50% threshold is used when defining what is considered legitimate scrap metal for recycling. For consistency in the global trade, we would respectfully request that a uniform standard of 50% be used within China as well,” Wiener wrote.

Final Thoughts

Many recycling experts, including ISRI, are very concerned how China can possibly measure 0.03% and place such tight controls on imports. According to the Bureau of International Recycling, restrictions on scrap imports into China will become more and more aggressive as time goes on. Many leaders understand what China is trying to do environmentally, but there needs to be consistent threshold for fair global trade and ISRI plans to fight the ban.

The biggest take away is China’s need to have clearer details and specifications of the ban. In the immediate future, the Metals Industry needs to be alert and keep a close watch on the proposed “quality threshold” specifications.