Focus shifts back to China as Covid-19 crisis fades

Shore crane loading containers on freight ship.
03.06.2020 − 

Recycling industry insiders expect that China will play a key role in markets for secondary raw materials in the wake of the coronavirus pandemic. But perhaps it will be a different role than before as multinational companies rethink their dependence on Chinese manufacturing. At Tuesday's "Spotlight on Trade" session of the Global eForum being organised by the Bureau of International Recycling, BIR president Tom Bird said that there "is a decoupling of industry from China back to points of origin and I think that is going to be the main subject when all this dies down".

His take was echoed by David Chiao of the Uni-All Group, who said that he saw parallels between Chinese businesses moving out of China now and similar industry shifts in Japan in the 60s and 70s. Specifically addressing the impact of the coronavirus pandemic on stainless steel scrap trading, Joost van Kleef of Oryx Stainless said that in the midst of the Covid-19 crisis, material was increasingly being bought in Europe for use in Europe and that sourcing materials regionally was a means of reducing risk in uncertain times. Max Craipeau of Greencore Resources Ltd noted that he was working with Japanese clients operating in China who were interested in making use of Greencore's factory in Indonesia because their own moves would take time. He noted that those movements were achieved not overnight, but on the order of months to years.

Mark Sellier of Global Metals Network also stressed that it would take years to move manufacturing. In the immediate term, he cautioned that "a more serious, directly Covid-related issue" was going to be unemployment in China and how the Chinese economy recovered. "Yes, there will be a stimulus package from the Chinese government, but how will they pay for it, what will happen to the RMB and how will that change the entire dynamic of the entire Chinese economy?" The coming months would be "very, very, very interesting", he said.

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