Chinese ban on waste imports could impact container shipping

Container shipping lines could lose around 5m teu of cargo a year following a recent import ban by China on importing a variety of waste materials for recycling, according to research from Drewry Maritime Advisors.

China’s new rules, announced on January 1st and applying from March 1st imposed a complete ban on the importing of unsorted waste paper, of Vanadium slag and of waste textiles, as well as wide-ranging restrictions on other recyclable materials such as a steel, plastics, wood, paper and cardboard.

China imported around 30m tonnes of waste paper and 8m tonnes of waste plastics in 2016. Dealers in the US, Japan and Europe are already struggling to find alternative recycling facilities.

Waste products constitute a large percentage of backhaul volumes from Europe and North America to China – the US exported two-thirds of its waste paper to China in 2016, some 13.2m tonnes, and about half of westbound transpacific volumes are waste products for recycling.

Drewry said that unless there was a dramatic about-turn, carriers could “kiss goodbye” to banned paper and plastics shipments. It estimated that worldwide unsorted paper imports to China were in the region of 500,000 teu in 2016, while the still-legal other types of waste paper brought the total to 2.5m teu.

Adding in other lower-volume commodities affected by the new ruling, Drewry estimated that there could be as much as between 4m and-5m teu at risk, equating to nearly 3% of world loaded container traffic.

The financial implications are smaller as waste products are routinely shipped at some of the lowest freight rate levels. Drewry also said that there could be further relief from the ongoing restructuring of the Chinese economy, which had seen an increase in demand for other, higher-paying, imports.