Update from BIR National Associations: Tumultuous year ends with mounting freight headaches

With the COVID-19 pandemic still central to everyday life in many parts of the world, BIR is continuing to provide regular updates on the current conditions and challenges facing the recycling industry. Latest feedback has been drawn from reports submitted by the world recycling organization’s network of member national associations to an online meeting in early December.

The picture in the USA is mixed: GDP has been on the increase and manufacturing output is within 5-6% of pre-COVID levels, and yet 11 million Americans are currently unemployed. Expectations are of a difficult and uncertain next three months amid the likelihood of further surges in infections and of a shift in policy focus following the recent US Presidential Election.

US recyclers looking to move material are being confronted by a lack of truck drivers and containers. Regarding the latter, charges for shipments from China to the US West Coast have been typically eight times higher than for movements in the opposite direction. Some containers are reportedly heading empty to Asia without the US recycling industry being given an opportunity to use them.

To the north, Canada is also witnessing driver and container shortages, as well as protests involving rail blockades in some regions. The Canadian Association of Recycling Industries is surveying its members on supply chain issues relating to COVID so that the information can be relayed to transport officials. 

Canada’s recycling industry is functioning as normal despite a fresh wave of COVID infections, some localized lockdowns and a record deficit in the economy. The Canadian government’s emphasis on a “green” recovery could entail job creation potential for the recycling industry.

In Chile, there has been a stabilization of the virus situation since August and critical cases have been falling, but a second wave is anticipated by early 2021. The domestic economy slumped 14% earlier this year but the GDP decline for 2020 as a whole is expected to be between 4.5% and 5.5%. Chile’s recyclers have been reporting better numbers since September this year and, on average, operations have recovered to 85-90% of their pre-COVID levels.

Although some countries in South East Asia - such as Malaysia - are still imposing strict virus-related measures, China is back to normal in business terms. Regarding trade, high demand for goods has led to sharp increases in freight costs of, for example, 200 to 300% for shipments from Hong Kong to South East Asia. Prices of most prime materials and plastics scrap have been heading upwards.

India’s COVID numbers have been improving and fatality rates remain low in comparison to many other countries; nevertheless, new waves of infection are still anticipated and states are continuing to adopt precautionary restrictions. Workers have been returning from their home towns and villages amid generally strong industrial demand, notably from the automotive sector.

To the west, England has just emerged from a further month of lockdown whereas the UK’s devolved governments in Scotland, Wales and Northern Ireland have been implementing their own systems for dealing with COVID-19, thus leading to some degree of confusion. The UK’s scrap yards have continued to operate and, in many instances, have been able to rely on existing high stocks.

Uncertainty in UK business circles has been exacerbated by ongoing - and as yet unsuccessful - attempts to secure a Brexit trade deal ahead of the transition period deadline of December 31 this year. Major exporters fear that the costs of shipping to Continental Europe could climb by 25% and that massive lorry queues could be seen on motorways as a result of delays at the ports. These concerns come at a time when exporters are already witnessing significant container shortages, blank sailings and freight hikes.

Elsewhere in Europe, scrap yards in Spain have been operating normally but are, on average, 5-8% down on full capacity. Non-ferrous operations in Germany have also been satisfactory despite ongoing COVID measures.

Bulgaria is seeing a high number of COVID cases at present, and the closure of schools and kindergartens has led to a shortage of workers at, for example, textiles sorting centres. In Hungary, where new COVID restrictions were introduced on November 10, concern surrounds a draft proposal to bring most aspects of waste management under the auspices of a single state enterprise, including collection and treatment; this would cover, for example, separately-collected municipal wastes as well as materials falling under extended producer responsibility schemes and deposit fee systems. Production facilities using recycled materials - such as paper mills and steelworks - are exempted, as is industrial production waste.

In Poland, where the pandemic is still very active, the government has announced new restrictions for Christmas Eve and a new economic stimulus package for businesses that have suffered during the second wave of the COVID-19 pandemic.

Although the threat of a Russian ferrous scrap export ban appears to have receded, there is now a possibility that export customs duties on scrap will be raised.