Southeast Asian aluminium scrap import volumes have surged in the past year, driven by the region’s burgeoning role as a key processing hub, where processed secondary aluminium ingots subsequently flow into key Asian markets, notably China, Taiwan and South Korea, Fastmarkets has heard. Following significant demand from market participants for more transparent coverage of the region, Fastmarkets launched four new prices for aluminium scrap, CIF Southeast Asia, on Tuesday March 25.
The suite includes three CIF Southeast Asian prices which are believed to be world-first launches — namely for 95/5 extrusions, used beverage cans (UBCs) and borings and turnings (Telic), Fastmarkets understands.
But despite the sharp growth in volumes and interest among market participants, the key regional market faces major headwinds from increasingly stringent customs checks and fiercer competition for scrap in the region.
Increasing import volumes
Aluminium scrap imports into the Association of Southeast Asian Nations (ASEAN) region have ballooned in the past year.
Thai imports of aluminium scrap under harmonized system (HS) code 7602 came in at record-highs of 91,702 tonnes in January and 149,630 tonnes in February, according to the latest Thai customs data.
That means import volumes to Thailand for the first two months of 2025 jumped by 142,416 tonnes (144%) from 98,916 tonnes imported in the same period in 2024. This marks the strongest start-of-year performance since the country first started importing aluminium scrap in 2007, the data showed.
Malaysian imports of aluminium scrap under the same code were 36,259 tonnes in January, up by 17,679 tonnes (95%) year on year from 18,580 tonnes in January 2024, according to Malaysian customs data.
On the other hand, Malaysian imports under HS code 7603 for aluminium flake — used by some market participants to skirt the strict import rules on aluminium scrap in Malaysia — were 41,322 tonnes in January, down by 69.3% year on year, suggesting a crackdown on improperly declared material.
Meanwhile, Vietnamese imports under HS code 7602 for aluminium scrap rose to 21,895 tonnes in January, up 70.6% year on year from 12,836 tonnes 12 months prior, according to customs statistics. Vietnam’s 2024 import volumes clocked 156,531 tonnes, up 2.7% year on year.
While the bulk of US-origin UBCs go to Thailand and India, Vietnamese volumes have also had a decent year on year increase.
Vietnam imported 6,385 tonnes of UBCs in 2024, as compared with 3,108 tonnes in 2023, a jump of 3,277 tonnes (105%) according to statistics from the US Department of Commerce.
Growing investment
Sources attributed the higher import volumes to increased interest from Chinese and Japanese companies to offshore their scrap processing facilities.
Due to the Chinese domestic production cap of 45 million tonnes per year for primary aluminium, Chinese market participants have been looking to increase their secondary aluminium output, meaning they would need to source for more recycled materials.
China loosened its copper and aluminium scrap import restrictions in November, but most importers said the end-of-life material still isn’t clean enough to import directly from the US, EU or UK. As such, many are turning to Southeast Asia to clean up the scrap and import secondary aluminium ingots from there into China instead.
Securing material from Southeast Asia also helps smelters get around any tariffs that may arise from US-China trade tensions, one Chinese trader said.
Given that China and Hong Kong did not apply to continue receiving EU scrap metals classified as “waste” once the export restrictions come into effect as part of the revamped EU Waste Shipment Regulation (WSR) in May 2027, this could cement Southeast Asia’s strategic importance as a scrap processing hub, a Singapore-based trader also said.
Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam all applied to continue receiving EU waste shipments.
Also looking to get a slice of the Southeast Asian pie, Japanese manufacturers and trading houses have been strengthening their presence in the region.
Most recently, Marubeni announced its new partnership in February with Vietnam’s NM2 to expand UBC offerings. The can stock is sourced domestically and processed into ADC12, as well as 3000 series coils, to be exported around Southeast Asia, Korea, China and Taiwan, a company representative said.
Other major Japanese participants in the region include UACJ, Hanwa, Toyota Tsusho and Nikkei MC Aluminium — a joint venture by Daiki Aluminium and Nippon Light Metal.
Suppliers were quoting $2,030-2,080 per tonne CIF Southeast for spot imports of baled UBC, with a US cargo heard sold at $2,030-2,040 per tonne. Bids were heard at $1,950-2,000 per tonne, while key market participants estimated that workable prices were probably $2,000-2,050 per tonne.
Fastmarkets’ weekly price assessment for aluminium scrap, used beverage cans (Taldon), cif Southeast Asia was $2,000-2,050 per tonne on March 25.
Stringent customs checks cause major delays
Despite the growing import appetite, market participants say volumes have been stifled by worsening logistical challenges.
Thai and Malaysian authorities reportedly heightened regulatory scrutiny on scrapyards again in early 2025 to curtail imports of off-grade material.
The bigger headache, however, has been Malaysia’s increasingly stringent customs checks, according to sources.
The Standard and Industrial Research of Malaysia (SIRIM) updated its guidelines for importation and inspection of metal scrap in May, meaning that all incoming scrap cargoes will require a Certificate of Approval (COA).
The inspections are on a “per customer per supplier” basis, a major scrap supplier source told Fastmarkets.
“For example, if both customer A and B applied SIRIM for supplier A, SIRIM would send [for an] inspection twice.”
The inspections have resulted in long delays, with some containers heard sitting at the port for nearly a year now, the source added.
In June, Malaysian port authorities had already seized over 100 containers of illegal e-waste, while cargoes suspected to be using the wrong HS code were being detained, Fastmarkets heard on the sidelines of the Material Recycling Association of India’s (MRAI) conference in Bangkok.
Zorba, in particular, is frequently mis-declared under HS code 7603 aluminium flake instead of 7602 aluminium scrap, Fastmarkets understands.
Market participants said deals for zorba 98/2 were mostly being concluded between $2,010-2,050 per tonne CIF Southeast Asia over the last seven days, though a US-origin cargo was also heard procured at $2,100 per tonne.
A European supplier quoted $2,100 per tonne CIF Thailand, while US suppliers were quoting $2,020-2,080 per tonne.
Fastmarkets’ weekly price assessment for zorba, 98/2, cif Southeast Asia was $2,010-2,100 per tonne on March 25.
As a result of the delays, many suppliers were heard diverting Port Klang cargoes to nearby ports like Thailand’s Laem Chabang, Vietnam’s Hai Phong and the port of Hong Kong instead.
“Even in Thailand, however, environmental inspections have led to the temporary shutdown of numerous processing facilities, complicating production schedules and impacting supply chain stability,” the Bureau of International Recycling (BIR) said in its latest non-ferrous report on Wednesday March 19.
“Limited production permits and inconsistent policy frameworks have created an atmosphere of uncertainty among processors, leading to weakened investor confidence and contributing to a notable decline in metals demand,” the report said.
Tariff fears, talks of export bans shrink scrap supply
US tariff concerns have also fueled a meteoric rise in scrap export offers from major suppliers, capping import volumes into Southeast Asia, market sources said
US President Donald Trump imposed a 25% tariff on all steel and aluminium imports effective March 12. More tariffs are expected to come in early April.
The US domestic market has been scrambling to secure cargoes, driven by tighter inflows from Mexico and Canada. Robust domestic demand diminished availability for export, pushing export offers higher as well.
Amid initial market talk of Australia being exempt from US tariffs, several cargoes bound for Southeast Asia and India were heard to have been canceled, so that the scrap could be rerouted to the US instead, sources said.
“Prices are rising and most [shipments] sailing from Australia were blanks this month, which has resulted in lesser supply,” an India-based trader said.
UK and European scrap supplies have also been similarly squeezed, sending UK secondary aluminium prices to a seven-month-high and European prices to a near-three-year-high.
In a bid to secure more of the strategic secondary raw material, the European Commission said on March 19 that they were mulling plans for EU scrap export restrictions by the third quarter of 2025, potentially disrupting global trade flows.
For high grade (HG) telic pucks, offers ranged $1,900-1,950 per tonne CIF Southeast Asia by Tuesday, but these were too high and mostly flowing into South Korea instead.
“[Demand for] HG in the US is very strong, so not much is being exported now. In the EU, German demand can be very strong for this grade too,” a US scrap supplier said.
Mixed puck offers came in at around $1,800 per tonne CIF Southeast Asia, while loose and briquette offers were closer to $1,720-1,750 per tonne.
Fastmarkets’ weekly price assessment for aluminium scrap, borings and turnings (Telic), cif Southeast Asia was $1,720-1,820 per tonne on March 25.
It’s a similar situation for extrusion scrap, sources said. Southeast Asian buyers commented that they’re hungry for material but are finding it difficult to secure scrap amid fierce competition.
“For cleaner material like mill-finished extrusions, currently the Europe and US domestic market is much stronger, so most of the cleaner material is not really coming to Asia right now,” a Hong Kong-based trader said.
US/EU-origin 95/5 extrusion offers came in at $2,250-2,310 per tonne CIF Southeast Asia by Tuesday. Bids were mostly $2,200-2,280 per tonne, although some buyers said they would be willing to pay as high as $2,300 per tonne.
A Japanese 6063 cargo was heard sold at $2,230 per tonne CIF Manila.
The corresponding weekly price assessment for aluminium scrap, 95/5 Extrusions (Tata), cif Southeast Asia was $2,230-2,300 per tonne on March 25.
Higher scrap prices have also pushed offers of secondary aluminium alloy ingots like ADC12 higher. Suppliers were quoting as high as $2,600 per tonne for ADC12 into Japan in the week to March 19, as compared with $2,380-2,400 per tonne a month earlier.
Fastmarkets’ price assessment for aluminium ingot ADC 12 spot (MJP), cfr Japan was $2,400-2,480 per tonne on March 19, up $20-80 per tonne from $2,380-2,400 per tonne on February 19.
Lee Allen, in London, contributed to this article.
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