At the time of writing, it appears Malaysian state-based agency SIRIM QAS International may soon be moving forward with more restrictive import policies for both non-ferrous and ferrous metal scrap. Since early this year, SIRIM and the Malaysian Non-ferrous Metals Association have been holding ongoing negotiations regarding the establishment of a minimum threshold for the non-metallic and non-conforming content of all imports. As well as quantifying the non-conforming content, the negotiations have also covered who will oversee the inspection process and whether the inspection will take place at origin or destination. It has been reported that inspections will have to be carried out by SIRIM or by a registered Foreign Inspection Body (none of which have yet been named). Overall inspection costs remain a concern but more important still are the very restrictive thresholds of 99.75% metal content for ferrous, aluminium and copper scrap.
While enactment and enforcement of such thresholds remain unclear, what is clear is that their introduction would effectively mean a ban on imports of metal scrap. This would cut supplies of copper, aluminium and steel raw materials to Malaysia - the region’s recycling hub and one of the principal destinations for US copper and aluminium scrap exports.
The impact on the recycling industry would be huge. In 2020, the copper, aluminium and ferrous scraps imported into Malaysia were worth, respectively, US$ 578 million, US$ 594 million and US$ 984 million, according to the country’s customs data.
At this time, no official date has been announced for the implementation of these new regulations. The introduction of this new import policy is coming at the most inopportune time as the region is still struggling to contain further COVID outbreaks. The combination of these new proposed import restrictions and the region’s continuing fight against the virus will put at severe risk Malaysia’s place in the global supply chain of recycled copper, aluminium and other metal-based resources.