The whole world is talking about the effects of the coronavirus pandemic on all the sectors across the globe. Almost every conversation one has seems to revolve around COVID-19! The pandemic is affecting our daily lives in the most shocking manner and it is quite a unique and challenging situation we find ourselves in! A waste industry expert we recently spoke to said, “it is one of the greatest disasters of our time.”

As the situation worsened in March, more and more countries started adopting stringent measures in an effort to stop the spread of the coronavirus, with most of them instituting either a partial or total lockdown by the end of March.

The pandemic has caused mass disruptions, with nearly all activities pretty much coming to a standstill over the past two months, impacting most major industries and the Recycling sector is no exception. At the global level, recycling activities in all segments including paper, plastic, metals, etc. have been disrupted with the sector experiencing an overall slowdown in business, with many countries facing logistical and operational challenges.

The closure of the industry in China ever since it was affected by the coronavirus has brought a negative effect on economic development, and the demand for recycled plastics was also affected, says an industry expert.

China, being one of the significant users and importers of recycled plastic granules, had no demand for the material, and this brought on a negative impact on the prices. Exporters were unable to send shipments to China due to the closure of seaports in the country, which led to an increase in stock of recycled granules in Europe. This, along with low demand led to a decrease in price of recycled granules. Southeast Asian buyers were accepting plastic scrap from Europe, but prices fell by 15-20 percent in March. Though China has been able to control the spread of the coronavirus, the rest of the world is now trying to combat it, and with most countries in the lockdown phase, it will surely impact the generation of plastic scrap and the whole chain down the line.

The same is the case with other recyclables as well. Reduced trade with China in all segments, mainly due to the spread of the coronavirus resulting in a slowdown in manufacturing, plus the closure of all sectors except those considered essential, is having a major effect on China and many countries globally. Moreover, according to industry analysts, with the lockdown continuing in major economies and port closures, the global demand for products made and shipped out of China will plunge further.

The metal scrap recycling industry has been affected, but the situation varies from nation to nation, says one recycling expert. Scrap yards being a vital part in the supply chain remain operational in most parts of the world, however traders see minimal trading activities.

In the Middle East, Saudi Arabia implemented strict legislations on yard timings, i.e., 7am to 6pm. Additionally, the country has imposed curfew during the evening hours. In the United Arab Emirates, most scrap companies have executed stringent coronavirus containment measures by reducing workforce and operational hours. Though ports in the country remain open, export is said to have significantly dropped due to scarcity of scrap material.

India took stern measures in an attempt to contain the spread of coronavirus. The country instituted a total lockdown in March and stopped all transportation services including rail and road and closed all port operations. The lockdown has now been extended till 3rd May.

The recycling industry in India has been suffering from export and shipping issues amid the lockdown. Shipments are stuck at ports since the lockdown, while shipping companies declared themselves operational and have been asking scrap importers to clear their consignments or pay penalty for engaging the containers beyond the agreed transportation period.

In the last week of March, Material Recycling Association of India (MRAI) urged the central government to waive off the detention and demurrage charges for a month in order to rescue recyclers who have been caught unawares in countrywide lockdown. The recycling industry, which imports various scrap material overseas, has built a stockpile of about one million ton of metal scrap alone at various ports, as per a report in The Hindu Businessline. The value of scrap in the container would become zero if the shipping companies charge them detention demurrage for a whole month, plus other charges like ground rent, CFS charges, etc., Sanjay Mehta, President, MRAI said. The value of iron scrap is about $5,000 for a container. For a container of 20 feet, the detention charges are about $52 per day and amounts to about $1,750 for a month including different charges, so adding all other charges like ground rent, CFS (container freight station) charges, and transportation the value of the goods in the container will become zero, he noted.

Companies are not in a position to make payments and take deliveries of the goods as the country instituted a total lockdown. Further, metal prices have declined by 25-30 per cent since outbreak of coronavirus in China. India’s secondary metal producers had procured the metal scrap overseas three months back based on prevailing prices, but the sharp fall in metal prices has now made imported raw materials costlier that finished metal prices.

Shipping companies are charging a hefty fee during the crisis, which Mehta says will not only erode working capital, but will also make many small businesses go bankrupt. Despite MRAI’s representations to the ministry of shipping and domestic and overseas shipping companies for waiver of charges, and the intervention of the Shipping Ministry and DG Shipping in relation to waiver of detention/demurrage/ ground rent, there doesn’t seem to be a solution at present, with shipping lines not adhering to the notification.

The Trade body acknowledged that these are “challenging times” and issued a five-point general advisory to members of the trade urging both suppliers and buyers to work together and abide by contractual obligations. MRAI said it was working around the clock with all stakeholders, including government, importers, traders/agents etc., to minimise the economic impact of this crisis.

In the USA, the situation varies from state to state, but COVID-19 is surely having an impact on the recycling industry. And as per a report in The Independent, there has been a 50 to 60 percent drop in commercial recycling. This decrease is mainly attributed to the temporary closure of non-essential businesses as per the requirements. Despite a decrease in commercial recycling, residential recycling is expected to rise, as more Americans are working from home as per the advice of public health officials to stay home.

Industry associations like BIR and ISRI have also come forward to support the recyclers in these tough times. BIR announced it has officially contacted governments, shipping lines and their international organisations as well as port authorities, so that they support the recycling industry’s request to waive costs and fees on containers stuck in ports due to government shutdowns, as well as ground charge for stuck containers. The organisation is also promoting the implementation of ‘green lanes’ to expedite trade in goods, including recyclables.

Even though a number of governments have classified recycling as essential activities, which helped ease the operations of the members, BIR expressed concerns of the consequences for their members where seaports are locked down.

At the beginning of April, BIR also called upon governments to recognise recycling industries as essential activities, as per a press release. The organisation said the regular supply of recyclables is essential to recycling industries in order for them to maintain a steady stream of supplies of secondary raw material to downstream manufacturing industries, many of the considered essential businesses themselves.

In Europe, Italy has been closing down smelters as part of its bid to control the pandemic by shutting all non-essential companies, as per BIR ad hoc updates related to recycling in various countries and regions. Owing to a shortage of workers in France, most small to mediumsized businesses are closed. Large enterprises are partially open, with only 40 percent of yards in operation. While there is no more commercial business, they are being supplied by those production plants still in operation, but there’s uncertainty about how long this will continue.

There is no official lockdown in Singapore and, technically speaking, scrap yards are open for business. The report also states that this is not the case in practice, because the majority of workers are either Chinese who have not returned since the Chinese New Year holidays or Malaysians who are not able to return because of border closures. There is also massive logistics disruption to container shipments. Malaysia is effectively in lockdown regarding import cargoes, with only essential goods permitted. With scrap metals not categorised as essential, their importation is not being allowed at present.