UPDATED, June 5, 2018: The China Certification and Inspection Group (CCIC) North America Inc. is set to begin accepting pre-shipment applications starting June 8, according to a letter posted by the Bureau of International Recycling. Applicants have been advised that there could be a five-day turnaround time before inspections can be scheduled.

While this effectively amounts to a full restart of scrap exports to China, the monthlong delay is expected to have residual effects heading into June due to the backlog and enforcement of tighter inspection standards moving forward.

UPDATED, May 23, 2018: The Institute of Scrap Recycling Industries (ISRI) signaled on Tuesday that China began allowing the CCIC's Canadian operations to inspect and issue certificates for U.S. shipments, according to Resource Recycling. The inspections will continue through June 4 when the CCIC U.S. suspension ends.

Dive Brief:

• The Chinese government has suspended China Certification and Inspection Group (CCIC) North America for one month, halting inspections and certificate issuance from May 4 through June 4, according to a notice from the Institute of Scrap Recycling Industries.
• The Chinese government will continue to accept shipments sent before May 3 that contain CCIC certificates, but without guarantee of entry. Those shipments will be subject to 100% inspection that could include further lab testing, which may cost upward of $20,000, according to Recycling Today.
• Because CCIC NA is believed to be the only pre-shipment inspection company to receive an import license since February, this effectively shuts down all scrap exports to the country. In a statement, ISRI said "there is no doubt this will severely impact U.S. scrap exports to China" and pledged to work "aggressively" on learning more.

Dive Insight:

This is the latest, and perhaps most direct, escalation in China's crackdown on the scrap trade since its initial ban of 24 select categories in July 2017. In the months since, the country's new 0.5% contamination standard for all materials, and ban on mixed paper and plastics, has roiled recycling markets around the world. Multiple U.S. states continue to feel the effects and the industry's largest companies have begun talking about ways to change their business models as a result.

While this is all still very unsettled, there had been a sense that the situation may have begun to improve in April and a new normal might be setting in. Companies are finding some new markets in Southeast Asia and remained hopeful that China would change course after the price of buying virgin pulp grew too steep. Based on this news — and last month's announcement of a ban on 32 other industrial scrap categories — it's hard to tell whether such optimism is still going to pan out.

National Waste & Recycling Association President and CEO Darrell Smith said the news was a concern, and that companies needed more time to respond. However, he still maintained the upbeat tone he's been projecting on the issue. 

"I remain optimistic that the waste handlers in the United States will find solutions to this bump in the road as they investigate new markets, develop new technological innovations, encourage new uses domestically for recyclables, and use this as an opportunity to educate the American people about the importance of getting the trash out of the recyclables stream," he said in a statement emailed to Waste Dive. "The American people love to recycle, and the market will find a way."

The Solid Waste Association of North America said it was in contact with the relevant federal agencies about this issue and was also very concerned.

"I wonder whether it is a coincidence that the Chinese shut down CICC the same week that Treasury Secretary Mnuchin, USTR Robert Lighthizer and White House Trade Adviser Peter Navarro are in Beijing for bilateral trade negotiations with high-level Chinese officials. As I stated at last week’s Investors Summit, I am concerned that the recycling issue is caught up in larger trade conflicts between China and the United States," CEO David Biderman wrote in an email to Waste Dive.

With so many changes at play around tariffs and other trade restrictions, the scrap industry may not be able to escape the mounting political tensions between Washington and Beijing. Before this news, China had already cut back its scrap imports precipitously, and even all of the Southeast Asian markets combined weren't seen as big enough to fill that demand.

Now that options have been further limited, more stockpiling, temporary disposal, program changes and processing price increases may be on the horizon for U.S. recyclers in the months ahead.