Posts Tagged ‘US Scrap Metal Exports’

JOC Insights by Mario Moreno: U.S. Exports of Scrap Plastics, Paper & Metals to China

September 25, 2013

U.S. exports of scrap paper, plastics, and metals to China have increased at a remarkable pace over the last 16 years. Between 1996 and 2012, the dollar value of U.S. scrap exports to China in real terms increased at a compound annual growth rate of 24%, allowing China to take 47% of the market in 2012, up from 6% in 1996. Over that same period, U.S. scrap exports to all other markets increased by just 5% a year.

US Scrap Exports to China

Given weak global economic conditions, China’s demand for raw materials declined last year resulting in lower imports of U.S. scrap. In mid February, the “Green Fence” policy was launched with the objective to drastically increase the inspections of containers carrying scrap products to screen off adulterated products and improve China’s environment. Shipping executives began to notice the policy’s impact over trade volumes soon after its implementation. But, what was the monetary impact of the policy over the U.S. – to – China scrap export trade in the months following the policy’s launch?

SEVERE IMPACT ON U.S. SCRAP PLASTIC EXPORTS TO CHINA

U.S. exports of scrap materials to China have been struggling for over a year on weak global demand. But, it appears the Green Fence policy exacerbated the export problems. Before the policy’s implementation in mid February, U.S. exports of scrap plastics to China in nominal value were expected to decline in March by 14.4% y-o-y and amount to $40.4 million, but the value of exports actually declined 31% y-o-y and totaled $32.6 million. April was no better. The expectation for April was a drop of 12% Y-o-Y but the value of exports actually tumbled 39.7%. The expectation for May was a drop of 6.8% y-o-y but the contraction was more severe, down 26.3%.

US Scrap Plastic Exports to China

MODEST IMPACT ON U.S. SCRAP PAPER EXPORTS TO CHINA

The policy’s impact over U.S. scrap paper exports appears to be less severe. Before the policy’s implementation in mid February, U.S. exports of scrap paper to China in nominal value were expected to decline in March by 10.6% y-o-y and amount to $175.5 million, but the value of exports actually declined 14.3% y-o-y and totaled $168.2 million. The expectation for April was a drop of 2.9% y-o-y but the value of exports actually declined by only 1.6%. The expectation for May was a drop of 5.9% y-o-y but the value of exports actually declined by 8.6%.

US Scrap Paper Exports to China

SEVERE IMPACT ON U.S. SCRAP METALS EXPORTS TO CHINA

Before the policy’s implementation in mid February, U.S. exports of scrap metals to China in nominal value were expected to decline in March by 6.7% y-o-y and amount to $635.7 million, but the value of exports actually tumbled 22.9% y-o-y and totaled $525.3 million. The expectation for April was an increase of 5.4% y-o-y but the value of exports actually tumbled by 22.5%. The expectation for May was an increase of 19.2% y-o-y but the value of exports actually declined by 5.9%.

US Scrap Metal Exports to China

More of Moreno’s trade and economic analysis can be obtained by subscribing to JOC Insights or by following him on Twitter @MarioMoreno_JoC.


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