SHANGHAI, Sep 8 (SMM) – The Malaysian Ministry of International Trade and Industry on September 1 announced that the temporary grace period for the tightening of metal scrap import standards, originally scheduled to expire on August 31, will be extended by two months to October 31, in order that exporters will get full prepared.
SMM understood that many companies at home and abroad still lack knowledge of the implementation and details of the new standard for metal scrap imports in Malaysia. Meanwhile, the pandemic situation in Malaysia is still very serious, with more than 20,000 new confirmed cases every day. So whether the new standard can be implemented after October 31 is still a big doubt.
With increasing awareness of environmental protection in Southeast Asia, Malaysia plans to tighten the standards for allowable imports of metal scrap this year, requiring that metal content in imported copper scrap be at least 94.75%, the content of solid ferrous metal not exceed 5.0%, non-metallic scrap content not exceed 0.25 %, and the content of circuit board or electronic waste not exceed 0%. The requirements of the new standard are all but as strict as the secondary copper raw material standards in China, which means that local recycling companies in Malaysia will not be able to import Category Seven copper scrap (including scrap cables, scrap motors, scrap transformers, scrap hardware) or some low-grade Category Six copper scrap (including #2 copper, brass). To ensure the implementation of the new policy, Malaysia has also applied a new Certificate of Approval (COA) testing procedure.
According to local recycling companies in Malaysia, most of the low-grade raw materials for recycling and processing rely on imported supplies. If the new standard is implemented, companies engaging in recycling and processing, like copper granule factories, will bear the brunt. It will become difficult for companies to survive. But it remains uncertain if large numbers of recycling companies will withdraw from Malaysia. Some companies are likely to turn to produce finished products and engage in processing. The new standards will definitely restrict recycling companies from investing in Malaysia, and resources will be transferred to other regions.
From January to July this year, China imported 177,700 mt of raw materials for secondary copper from Malaysia, accounting for 18.30% of the total imports, ranking first. If Malaysia’s new metal scrap import standards are officially implemented in November, leading to a gradual contraction of Malayan copper scrap exports, Chinese importers could hardly make up for the gap from other countries. In this scenario, overseas resources that meet China’s import standards will be tighter and prices will be more firm, affecting China’s imports of raw materials for secondary copper. The already tight supply of copper scrap in China will deteriorate.
Malaysia is now a global metal scrap centre, receiving a large amount of low-grade copper scrap from the United States and Europe, which will be exported after being dismantled and processed. However, after the implementation of new metal scrap import standards, Malaysia is likely to lose this influence. Low-grade copper scrap from Europe and the United States will flow to the Middle East or other parts of Southeast Asia. According to the distribution and geographical location of suppliers of China’s copper scrap imports, the scale of dismantling in Thailand, the Philippines, Vietnam, Saudi Arabia, the UAE and Pakistan is relatively large. But industrial transfers normally take a long period.