A lot of press coverage has been given to the overall effect of the recent trade war between China and the United States, but there hasn’t been a lot said about how this might affect individuals with relatively few business interests in China. While companies that rely on steel imports and exports felt the effects of increased tariffs and banned products almost immediately, many US consumers will not feel the consequences of these new restrictions for several months.
Most recently, Chinese customs inspectors stated that they would no longer be allowing scrap metal into the country. Ostensibly proclaimed as a measure to reduce pollution, a number of companies in both the United States and China have seen this move as a further escalation of the trade war. By effectively banning imports of steel, it is essentially halting the recycling pipeline between the two countries.
What Does Shutting Down this Pipeline Mean?
When scrap metal can no longer be easily recycled, it forces companies to look for new places to recycle these materials. Other facilities might not be able to handle the volume of this scrap, forcing a search for multiple recyclers. These changes will cost a significant amount of money, potentially raising the processing costs for recycling. If the processing of scrap metal becomes more expensive than the cost to mine new material, most scrap metal dealers will allow their stockpiles to grow. Meanwhile, the reduction of product available on the market will likely increase the price of metal in markets all over the world.
What Does This Mean for a US Homeowner?
If the price of steel increases, many homeowners will be in for a terrible shock when it comes time to repair or replace items around their home. Particularly, homeowners who are looking to conduct renovations will need to be aware of the increased costs of materials. While products such as steel support beams will increase, it’s also likely that the increase in steel prices will affect items such a metal shelving and appliances.
What About Copper?
Scrap metal recycling of copper is also likely to be suspended, making it more difficult to find a processor for this metal. Because copper prices were already high before this, however, it is likely that there will simply be delays in getting new product rather than an increase in prices. The high price of new copper makes it much more likely that scrap metal haulers and recyclers will look for new places to process their copper rather than simply pulling it off the market. There were already several manufacturers complaining about delays to get copper before this escalation in the trade war, however, and these delays will likely get worse.
For homeowners, a copper shortage will likely mean delays in installing new electrical wiring and getting specially made appliances.
Whether you're a homeowner or a business owner, at Central Kentucky Fiber Resources, we can answer all of your questions about China's import ban. Contact us today to learn more.