Shanghai Scrap

A chilling item from Xinhua, the Chinese state-run news agency, reports that flooding along the Yangtse River will soon crest at the Three Gorges Dam. According to the report, current inflows into the dam’s reservoir already exceed the amount of water that the dam itself can disgorge, and those inflows are expected to increase. Can the dam sustain the stress? According to an unnamed source in the story, that’s less than certain:

“The Three Gorges Dam has opened 18 sluices and the water level in the reservoir will continue to rise,” said a worker with one of the dam’s operation department. “The safety of the dam will be tested.“

Over the last two weeks rumors and facts have been circulating in regard to a massive Chinese government crackdown on the scrap metal import industry in Southern China. Recently, I’ve received quite a few inquiries from industry players, media (both trade and general), and environmental groups as to what – exactly – is happening. Unfortunately, I am not in South China, so I cannot provide on-the-ground reporting. However, I have been in contact with many people who are directly and indirectly involved with the situation, and – so far as I can reveal information – this is what I know:

[Update: readers of this blog who are not scrap industry players might take note of the fact that scrap is the top US export to China, by volume ... and the United States isn't even the leading exporter of most grades of scrap to China. Japan is. This is a major business story, with serious consequences.]

1. The crackdown began in mid-June and not – as many have suggested – in early July. (more…)