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South East Asia

COVID infections are continuing to surge in several major South East Asian countries. The spread of the more transmissible Delta variant has pushed daily cases to record highs in Indonesia, Malaysia and Thailand over recent weeks. This has led to more stringent restrictions in Indonesia and Thailand, and to an extension of national lockdown restrictions in Malaysia. Whereas there had been optimism that most of the region’s economies would rebound during the second half of 2021, these renewed virus surges and continued restrictions are likely to slow economic growth significantly over this period.

As previously reported, the newly-proposed guidelines for the importation of metal scrap into Malaysia have yet to be finalized. Negotiations between the Malaysia Non-ferrous Metals Association and state-based agency SIRIM QAS International Sdn. Bhd remain ongoing with respect to the establishment of a minimum threshold for non-metallic and non-conforming content for all imports. As well as quantifying the non-conforming content, another aspect of the negotiations concerns who will oversee the inspection process and where the inspection will take place, at origin or destination.

If the proposed import restrictions are adopted, it is feared Malaysia could see many companies which had invested heavily in metal recycling fleeing to other less restrictive regions within South East Asia. Additionally, any future investments in Malaysia’s scrap recycling industry could be limited.

The continuing battles with COVID, along with the proposed stricter guidelines on metal scrap imports, have contributed to slowing demand for both insulated copper wire and Zorba within Malaysia. The uncertainty over the pandemic and potential import restrictions has prompted many of the country’s processors to adopt a wait-and-see approach.