Barriers to entry

Throughout 2021, prices for aluminum, copper and other types of nonferrous scrap have trended upward, with processors and traders citing global demand outpacing supply as a prevailing factor. However, at the Brussels-based Bureau of International Recycling (BIR) Non-Ferrous Division meeting at the association’s 2021 World Recycling Convention in early June, panelists portrayed actions and attitudes in two nations that view the increasingly valuable materials as “waste.”

Eric Tan, president of the Malaysia Non-Ferrous Metals Association, said his group is in dialogue with government officials there to prevent the enactment of a set of import guidelines that were released earlier this year by Malaysia-based inspection agency SIRIM QAS International.

“There is a deficiency of scrap in India that is being met through imports. These imports net-net are helping India commercially, socially, economically and environmentally. It helps the very objective of the circular economy.” – Dhawal Shah of Mumbai-based Metco Marketing

Nonferrous metals are essential to a “low-carbon future” involving electric vehicles, solar energy and increased digitalization, Tan said, and Malaysia can benefit by processing and melting scrap to produce those metals. “Availability and consistency in raw materials supply would induce more manufacturing activity in Malaysia,” he said, which “paves the foundation for skills transfer, know-how and R&D” to help the country’s economy evolve.

Instead, Tan said, “Many existing investments will go down the drain if the [import] guidelines enter into force,” and Malaysia’s potentially bright nonferrous future will run into a wall. “Our association is trying to convince the authorities” not to enact those guidelines, he said, adding that opposition to scrap seems to stem from media and social media reports linking it to plastic in the ocean.

As of early June, he noted, the guidelines’ requirement that scrap metal brought in must consist of 94.75 percent or more of one type of metal would completely prohibit trade in stainless steel, brass and cast iron alloys.

Dhawal Shah of Mumbai-based Metco Marketing said primary metal producers lobbied to create a system for tracking scrap imports that recyclers and secondary metals producers worry might lead to potential restrictions on those imports.

“This is all extra work for our industry,” he said. “Whether Malaysia or India, recyclers have to somehow deal with the overanxiety of lawmakers.”

Shah said scrap imports contribute up to 40 percent of the metals production feedstock in India, which is a nation that strives to produce yet more metal overall. “There is a deficiency of scrap in India that is being met through imports. These imports net-net are helping India commercially, socially, economically and environmentally. It helps the very objective of the circular economy.”

In addition to these concerns in India and Malaysia, China has announced that recycled steel, brass, copper and cast aluminum alloy shipments will be subject to inspection by customs officials in China as of June 10. The BIR reports that it is investigating the implications of this update for its members.