
One of the recycling industry’s foremost challenges in the 2010s was the series of Chinese policies indicating that the nation’s government was unwilling to import scrap materials in the same substantial volumes it previously had been.
Recyclers of nonferrous metals, among several materials, found a suddenly shifting trade landscape, with new routes being sculpted, and the adjustments came quickly and constantly.
What was true for U.S. and European exporters of aluminum and copper scrap was just as true for Chinese importers, and a common response by the latter group was to set up shop outside of China, with Malaysia being a common choice.
Changes in latitude

Critics of China’s “Green Fence” and “National Sword” scrap import restriction policies rightly could point out that the nation’s melt shops continued to require metal units, and switching to mining-based primary production hardly can be considered an environmental upgrade.
Producers of recycled-content nonferrous alloys based in China—and the sorting and processing firms that served them—likewise concluded their sector need not disappear but merely had to relocate.
The entrepreneurial sector often found a welcoming reception from economic development officials in Malaysian districts such as Port Klang and the state of Johor, which is located just north of Singapore.
In 2020, Malaysian ports brought in 176,000 metric tons of copper-bearing scrap from the United States, followed by 152,100 metric tons in 2021, according to U.S. Census Bureau figures published by the U.S. Geological Survey (USGS).
Relocated Chinese companies also played a lead role in Malaysia’s status as the top importer of aluminum scrap shipped from the U.S. in 2021, bringing in 520,000 metric tons that year.
By late 2021, however, recycling news out of Malaysia had far more to do with government facility and shipment inspection policies than it did with economic development.
In the following years, traders expressed increasing wariness of inspection policies and buyer reactions, causing an abrupt halt to the short-lived boom.
A Hong Kong-based trader says his volume of containers shipped to Malaysia dropped dramatically in 2022 as the nation’s inspection regimen was introduced.
“We now ship only smelter-ready grade material to larger companies who are known to the government there and comply with the new standards,” he says.
In 2022, the USGS calculated that buyers in Malaysia took delivery of just 66,710 metric tons of U.S. outbound copper-bearing scrap, a 56 percent year-on-year decline in the nation’s red metal scrap purchases. Aluminum scrap shipments from the U.S. to Malaysia likewise fell by 25 percent that year.
Several traders tell Recycling Today that the ongoing shriveling of the Malaysian market cannot be credited to policies that are created on a whim by its government.
The changes in latitude undertaken by an unhealthy percentage of companies that moved their operations south into Malaysia were not met with accompanying changes in attitude toward regulatory compliance.
Behavior modification
Nonferrous traders speaking to Recycling Today emphasize that they have numerous Chinese customers who play by the rules in Malaysia and wherever else they conduct business. Nearly all of them also say, however, they maintain a list of companies they have learned to avoid.
At a nonferrous recycling conference in Bangkok last year, a second Hong Kong-based trader told Recycling Today that as Malaysian customs and tax valuation inspections intensified, he received more than one request from customers to issue less-than-truthful invoices.
The requests reminded him of the type of activity that ultimately caused trouble for buyers and sellers a few years earlier in China.
A trader affiliated with a multilocation processing firm outside of Asia says he has worked with his colleagues to quickly identify and refuse business with firms that show hallmarks that could lead to later environmental or tax policy trouble.
“When I get approached by someone with a sorting operation who says, ‘I also buy e-scrap,’ that is an absolute red flag,” the trader says, noting that such materials can invite an entirely different level of government scrutiny.
A Singapore-based trader who focuses primarily on alloys and ingots says he largely has withdrawn from the scrap trade precisely because of such behavior and its results.
The trader affiliated with the large processing firm says his company has had one such container in limbo for more than 10 months in Malaysia.
Companies that ship copper- and aluminum-bearing scrap to Malaysia are concerned that similar behaviors are increasingly present in Thailand—Malaysia’s successor as the sorting and processing destination of choice.
In the December 2024 edition of the Bureau of International Recycling’s “World Mirror on Non-Ferrous Metals,” government activities in the Association of Southeast Asian Nations, or ASEAN, region are described as having a significant impact on nonferrous scrap imports in Malaysia and Thailand, noting that Malaysia’s Port Klang was “paralyzed” by severe congestion resulting from intensified customs inspections linked to a crackdown on possible corruption.
In Thailand, the report says recycling and processing operations have been heavily disrupted by a government crackdown on noncompliant facilities.
The Singaporean alloys trader says his examination into the Thai scrap market turned up more than one instance of buyers that obtained a low-volume scrap import license and subsequently far exceeded their quotas. One such importer told the Singaporean trader he could explain his way out of the situation if caught.
Other sources tell Recycling Today that Thailand appears to be going through a similar series of steps as seen in China and Malaysia, where one grade (say, baled wire and cable) and then another (perhaps zorba or shredded insulated copper wire) is labeled as too full of residuals to be considered a true commodity.

Where to next?
A rush into Thailand similar to that into Malaysia a few years earlier is showing signs of fatigue. As evidenced by the anecdote of the alloys trader, concerns about the sector’s future in Thailand exist.\
The migration process to some extent could be helping the nonferrous metals recycling sector get a better handle on which companies place a high value on operational transparency and which show signs of less virtuous behavior.
Recycling Today’s sources indicate some of those firms in the latter category already are conducting scouting missions into Cambodia and Laos. While those countries could lack the type of seaport access vital to trade, they would seem to offer underdeveloped regulatory climates and an eagerness for foreign direct investment.
Companies in the former category, however, are showing signs of maintaining their presence in Malaysia and attempting to navigate the transition to a more closely regulated landscape.
Shanghai-based recycled-content aluminum alloys producer Ye Chiu Group, for example, has made three of its five most recent investments in Malaysia.
The company opened its Ye Chiu Non-Ferrous Metal (Malaysia) Sendirian Berhad business back in 2015, which was well ahead of the post-National Sword investment curve.
In 2021, that Ye Chiu business unit invested to expand operations at its Tanjung Langsat Industrial Estate facility in Johor.
The company solidified its investment at that sizable site in Malaysia last year by starting up preheating furnaces commissioned to help produce several types of nonferrous alloys, according to Ye Chiu.
A smaller entrepreneur that has zorba and shredded insulated copper wire polishing operations in the Port Klang area says his company, likewise, intends to keep its flag planted in Malaysia.
He tells Recycling Today the past two years have presented challenges, referring in part to a rumored figure of some 800 shipping containers full of nonferrous scrap awaiting inspection and customs clearance at the port.
Mindful of the reputation earned by those companies that move around and seeing his firm as late to the game in Thailand, the entrepreneur says he will continue to work through the challenges as best he can in Malaysia.
Like all other traders who are dealing in global nonferrous recycling markets, he’ll be keeping one eye on pricing and market developments and the other warily cast toward regulatory developments.
The author is senior editor with the Recycling Today Media Group and can be reached at btaylor@gie.net.

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