The Reverse Proportionality of Lockdown and Scrap Exports

Lockdown and Scrap Exports

image source : YUAN TALKS

Lockdown, which seems like the only effective way of blocking the spread of COVID – 19, is having equally opposite impacts on the imports and exports of recyclables. This reverse proportionality of lockdown and scrap exports is hugely disrupting the overseas markets of America’s recovered plastic and paper industry.

Starting from a city of China, the fatal novel coronavirus took almost the entire world under its clamp in just three months. While the global count of infected patients has crossed ten lakhs now, more than fifty thousand have lost their lives. To control this devastation, just about all countries have latched their doors for trading of all goods except essentials. Alike several other industries, recovered paper and plastic industry of the US is experiencing troubles as the lockdown and scrap exports do not seem to go along.

After European nations, South and Southeast Asia are quarantining themselves, affecting the exports of US scrap plastic. The once largest overseas destination of US scrap, Malaysia, is now under locks and facing uncertainty in the imports and exports. As per Rakesh Surana, a representative of Gemini Corporation, Malaysian material buyers have limited their purchase of scrap, fearing the possibilities of ports’ closure in the coming weeks.

In January’s assessment, while India came up as the US recovered fiber’s second-largest importer after Malaysia, its ongoing lockdown is giving rise to Malaysia-like trade uncertainties for the US scrap exports. As per Surana, the 21 days long restrictions imposed in the country have caused some significant implications like containers stranding at the ports, and supply chain disturbances due to unavailability of truckers, etc. In his views, the same ambiance of uncertainty is also evident in partially quarantined downstream destinations of the US recyclables, like, Vietnam, Thailand, Taiwan, and South Korea.

In a recent announcement, the Institute of Scrap Recycling Industries (ISRI) mentioned “chaotic market conditions” as one of the significant lockdown impacts in India. As per ISRI, these conditions are particularly visible at the ports where only the import of “critical goods” is allowed. India’s lockdown has disturbed the flow of those commodities, which are deemed as “non-essential” by the government like recovered materials.

China, who seems to have come through the ruination of COVID – 19, has reopened its manufacturing industries. However, the impacts of its January and February’s shipping disturbances are still distressing the scrap exports of America. The country might have started operating normally, but its demand for scrap is still low due to its economic slowdown.

According to Surana, the entrapping of several containers in China during the beginning months of 2020 continues to hit the shipping lines with equipment shortages and higher freight rates. The easing of these demand and rate conflicts can be expected, as more and more countries are enacting lockdowns. As per him, coronavirus is rapidly changing the cross-border situations and increasing the trade uncertainties for the US scrap exporters.

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