continuously updated blog about China & India
You will be living in their world, very soon
Beware the Waking Dragon
BEIJING, Sept. 5 (Xinhua) — Chinese Premier Li Keqiang on Wednesday signed a State Council decree on the appointment of Ho Iat Seng as the fifth-term chief executive of the Macao Special Administrative Region (SAR).
The decision was made according to related regulations of the Basic Law of Macao SAR. Ho’s tenure will start from Dec. 20, 2019.
Source: Xinhua
US paper mills are expanding capacity to take advantage of a glut of cheap scrap. Some facilities that previously exported plastic or metal to China have retooled so they can process it themselves.
And in a twist, the investors include Chinese companies that are still interested in having access to waste paper or flattened bottles as raw material for manufacturing.
China, which had long been the world’s largest destination for paper, plastic and other recyclables, phased in import restrictions in January last year.
Global scrap prices plummeted, prompting waste-hauling companies to pass the cost of sorting and baling recyclables on to municipalities. With no market for the waste paper and plastic in their blue bins, some communities scaled back or suspended kerbside recycling programmes. But new domestic markets offer a glimmer of hope.
About US$1 billion in investment in US paper processing plants has been announced in the past six months, according to Dylan de Thomas, a vice-president at The Recycling Partnership, a non-profit organisation that tracks and works with the industry.
Hong Kong-based Nine Dragons, one of the world’s largest producers of cardboard boxes, has invested US$500 million over the past year to buy and expand or restart production at paper mills in Maine, Wisconsin and West Virginia.
Brian Boland, vice-president of government affairs and corporate initiatives for ND Paper, Nine Dragons’ US affiliate, said that as well as making paper from wood fibre, the mills would add production lines turning more than a million tonnes of scrap into pulp to make boxes.
“The paper industry has been in contraction since the early 2000s,” he said. “To see this kind of change is frankly amazing. Even though it’s a Chinese-owned company, it’s creating US jobs and revitalising communities like Old Town, Maine, where the old mill was shuttered.”
The Northeast Recycling Council said in a report last autumn that 17 North American paper mills had announced increased capacity to handle recyclable paper since the Chinese cut-off.
Another Chinese company, Global Win Wickliffe, is reopening a closed paper mill in Kentucky. Georgia-based Pratt Industries is constructing a mill in Wapakoneta, Ohio that will turn 425,000 tonnes of recycled paper per year into shipping boxes.
Plastics also had a lot of capacity coming online, de Thomas said, noting new or expanded plants in Texas, Pennsylvania, California and North Carolina that turned recycled plastic bottles into new bottles.
Chinese companies were investing in plastic and scrap metal recycling plants in Georgia, Indiana and North Carolina to make feedstocks for manufacturers in China, he said.
In New Brunswick, New Jersey, the recycling company GDB International exported bales of scrap plastic film such as pallet wrap and grocery bags for years. But when China started restricting imports, company president Sunil Bagaria installed new machinery to process it into pellets he sells profitably to manufacturers of garbage bags and plastic pipe.
The imports cut-off that China called “National Sword” was a much-needed wake-up call to his industry, he said.
“The export of plastic scrap played a big role in easing recycling in our country,” Bagaria said. “The downside is that infrastructure to do our own domestic recycling didn’t develop.”
China to suspend checks on US scrap metal shipments, halting imports
That was now changing, but he said far more domestic processing capacity would be needed as a growing number of countries restricted scrap imports.
“Ultimately, sooner or later, the society that produces plastic scrap will become responsible for recycling it,” he said.
It has also yet to be seen whether the new plants coming on line can quickly fix the problems for municipal recycling programmes that relied heavily on sales to China to get rid of piles of scrap.
“Chinese companies are investing in mills, but until we see what the demand is going to be at those mills, we’re stuck in this rut,” said Ben Harvey, whose company in Westborough, Massachusetts, collects trash and recyclables for about 30 communities.
He had a car park filled with stockpiled paper a year ago after China closed its doors, but eventually found buyers in India, Korea and Indonesia.
China to collect applications for scrap metal import licences from May
Keith Ristau, chief executive of Far West Recycling in Portland, Oregon, said most of the recyclable plastic his company collected used to go to China but now most of it went to processors in Canada or California.
To meet their standards, Far West invested in better equipment and more workers at its material recovery facility to reduce contamination.
In Sarepta, Louisiana, IntegriCo Composites is turning bales of hard-to-recycle mixed plastics into railroad ties. It expanded operations in 2017 with funding from New York-based Closed Loop Partners.
“As investors in domestic recycling and circular economy infrastructure in the US, we see what China has decided to do as very positive,” said Closed Loop founder Ron Gonen.
Source: SCMP
With a large Chinese-speaking minority, Malaysia was a top choice for Chinese recyclers looking to relocate, and official data showed plastic imports tripled from 2016 levels to 870,000 tonnes last year.
Huge mounds of plastic waste, dumped in the open, piled up as recyclers struggled to cope with the influx of packaging from everyday goods, such as foods and laundry detergents, from as far afield as Germany, the US, and Brazil.
Residents soon noticed the acrid stench over the town – the kind of odour that is usual in processing plastic, but environmental campaigners believed some of the fumes also came from the incineration of plastic waste that was too low quality to recycle.
“People were attacked by toxic fumes, waking them up at night. Many were coughing a lot,” resident Pua Lay Peng said.
“I could not sleep, I could not rest, I always felt fatigued,” the 47-year-old added.
Pua and other community members began investigating and, by mid-2018, had located about 40 processing plants, many of which appeared to be operating without proper permits.
Initial complaints to authorities went nowhere but they kept up pressure, and eventually the government took action. Authorities started closing down illegal factories in Jenjarom, and announced a nationwide temporary freeze on plastic import permits.
Thirty-three factories were closed down, although activists believed many had quietly moved elsewhere in the country. Residents said air quality had improved but some plastic dumps remained.
Chinese recycling expert breeds thousands of flies to turn kitchen waste into cash
In Australia, Europe and the US, many of those collecting plastic and other recyclables were left scrambling to find new places to send it.
They faced higher costs to have it processed by recyclers at home and in some cases resorted to sending it to landfill sites as the scrap piled up so quickly.
“Twelve months on, we are still feeling the effects but we have not moved to the solutions yet,” said Garth Lamb, president of industry body Waste Management and Resource Recovery Association of Australia.
Some have been quicker to adapt to the new environment, such as some local authority-run centres that collect recyclables in Adelaide, South Australia.
The centres used to send nearly everything – ranging from plastic to paper and glass – to China but now 80 per cent is processed by local companies, with most of the rest shipped to India.
“We moved quickly and looked to domestic markets,” Adam Faulkner, chief executive of the Northern Adelaide Waste Management Authority, said.
“We’ve found that by supporting local manufacturers, we’ve been able to get back to pre-China ban prices.”
In mainland China, imports of plastic waste dropped from 600,000 tonnes per month in 2016 to about 30,000 a month in 2018, according to data cited in a recent report from Greenpeace and environmental NGO Global Alliance for Incinerator Alternatives.
Once bustling centres of recycling were abandoned as firms shifted to Southeast Asia.
“It is a major showcase of China’s manufacturing capability,” said Sun Can, a Chuancai Securities analyst. “The company has its own technologies and is a powerful player in the global port machinery industry.”
Listed on the Shanghai exchange in 1997, Zhenhua’s shares have risen 41 per cent in the past 12 months, ending 2.1 per cent lower at 4.46 yuan on Friday. All three analysts who cover the stock recommend their clients either “buy” or “accumulate” the stock, expecting Zhenhua to be a major winner in China’s megaplan to build infrastructure along the old Silk Road in its Belt and Road Initiative (BRI).
Another major company that has emerged with China’s rising tide was China International Marine Containers (Group), or CIMC, a unit of the state-run conglomerate China Merchants Group. Established in 1980, the company took a little more than a decade to dominate the global industry, becoming the world’s largest maker of shipping containers since 1996.
Guosen Securities said in a research report that CIMC would face lower profit margin this year amid rising raw material costs and fiercer competition from global rivals.
Its shares have risen 43.7 per cent in the past 12 months on the Shenzhen exchange to 15.20 yuan as of Friday.
Source: SCMP
HONG KONG/LONDON (Reuters) – HSBC Holdings turned in a disappointing annual profit as higher costs and a stocks rout chipped away at its trading businesses, while warning that an economic slowdown in China and Britain would throw up further hurdles this year.
Chief Executive John Flint, rounding off his first year at the helm of the company, said the bank may have to scale back investment plans in order to avoid missing a key target known as ‘positive jaws’ – which tracks whether it is growing revenues faster than costs – for a second straight year.
HSBC remains alert to the downside risks of the current economic environment, economic environment and the future path of interest rates, Flint said, adding the bank was “committed” to the growth targets announced in June.
“We will be proactive in managing costs and investment to meet the risks to revenue growth where necessary, but we will not take short-term decisions that harm the long-term interests of the business,” Flint said on Tuesday, after HSBC reported a lower-than-expected 16 percent rise in 2018 profit before tax.
In June, Flint had said HSBC would invest $15-$17 billion in three years in areas including technology and China, while keeping profitability and dividend targets little changed.
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The bank said it failed to achieve positive jaws in 2018 due to the negative market environment in the fourth quarter.
A combination of U.S.-China trade tensions, central banks turning off the money taps and cooling growth in former hot spots wiped 10 percent off MSCI’s 47-country world stocks index last year, its first double-digit loss in any year since the 2008 global financial crisis.
Flint’s comments come as an economic slowdown in China, exacerbated by a bitter Sino-U.S. trade war, challenges HSBC’s strategy of pouring more resources into Asia where it already makes more than three quarters of its profits.
China’s economic growth slowed to 6.6 percent in 2018, the weakest in 28 years, weighed down by rising borrowing costs and a clampdown on riskier lending that starved smaller, private companies of capital and stifled investment.
Pressure on the world’s second-largest economy could increase if Beijing and Washington do not reach a deal soon to end their year-long trade dispute, which is taking a growing toll on export-reliant economies from Asia to Europe.
HSBC’s profits in Asia grew by 16 percent to $17.8 billion last year, accounting for 89 percent of the group profit.
“Clearly our customers are really more cautious and are more thoughtful around this trade war with the U.S.,” Flint said.
“It’s possible that we’ll see slightly lower growth rate this year but we are still going to see a growth rate.”
Since taking over from Stuart Gulliver last February, Flint has largely stuck to the same China-focused strategy as his predecessor while attempting to revive HSBC’s ailing U.S. franchise and putting less emphasis on its investment bank.
HSBC joined its London-based peer Royal Bank of Scotland in warning that uncertainties related to Brexit could drive businesses under.
“The longer we have the uncertainty the worse it’s going to be for the customers. Customers are absolutely postponing investment decisions … and that’s been the part of this slowdown that we have seen in the U.K.,” Flint said.
Earlier in the day, HSBC reported a profit before tax of $19.9 billion for 2018, versus $17.2 billion the year before, but below an average estimate of $22 billion, according to Refinitiv data based on forecasts from 17 analysts.
HSBC’s Hong Kong shares dropped as much as 2.7 percent after the earnings announcement.
The stock was down 1.4 percent at 0732 GMT, while the Hong Kong market index was 0.3 percent lower.
HSBC said it would pay a full-year dividend of $0.51 per share, roughly in line with analysts’ expectations. The bank was confident of maintaining the dividend at this level, it said.
The bank’s core capital ratio, a key measure of financial strength, fell to 14 percent at end-December from 14.5 percent at end-2017, mainly due to adverse foreign exchange movements.
Source: Reuters
continuously updated blog about China & India
continuously updated blog about China & India
continuously updated blog about China & India
CHINDIA ALERT: You'll be living in their world, very soon 