On stricter rules for environmental protection last year, China has witnessed shut down of obsolete induction furnaces around 100-120 MnT steelmaking capacity. As the result, Chinese ferrous scrap exports increased sharply, on the other hand, no significant fall in imports registered.
In the current scenario, China is observing a significant rise in the generation of miscellaneous goods scrap. ‘Chinese recycling industry must obey the instructions of the central government’ and should urgently work on the performance of scrap processing and should develop a proper system to work upon the ample volumes of scrap available in the country.
The attitude of building a new system in the recycling business is seen everywhere in China. However, there are two major reform the Chinese recycling industry is following –
1. Automation of recycling industry in China in order to cut labor cost –
Automation of recycling industry can result in a sharp reduction of labor cost in China.
In the scrap recycling industry tons of units of iron and non-ferrous scrap processed through crushing, mechanization of sorting, and even continue to process consistently to market on the basis of the sorted raw materials. Which requires plenty of labors.
For an instance, In the one of the major recycling factory in Zhejiang Taizhou district in China, around 20,000 MT iron scrap and 10,000 MT non-ferrous scrap is processed every month, and around only 2000 people including factory workers and individual employees work under the factory. If average salary earned by factory workers is about JPY 100,000 in Japan, the same has to be considered as high as around JPY 350,000 for the case of Hong Kong. Thus the burden of labor costs is very high on companies in China.
Indicating Hong Kong based companies will have to advance more rapidly than Japanese mechanization-operations due to the high labor costs than Japan.
2. Acquisitions made by large companies to obtain scaled economies in the country –
Large companies or those companies whose parent companies are listed in stock exchanges should promote the mechanization.
China towards investing in machine more than man –
Looking at large amount of scrap being processed, overburden of labor costs, the idea of investing in machine more than man looks considerable in Chinese recycling companies.
Therefore, using the ample funds where there is a capital force is also an important influencing factor leading recycling companies in China. Potential reform of the recycling site is the better option for the leading recycling companies in China.
In response to an urgent need to shift to automation in China, It has already started importing the latest crushing machines in line with well-arranged sorting machines for scrap processing which are being produced in large volumes in Europe.
In short, China is also going faster and proceeding to the high added value of recycling.
~Inputs from Iru Miru
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