In the fight against waste imports, the Indonesian government has announced the ban of import ferrous scrap shipments, if they do not come directly from the supplier port to Indonesian ports. The new regulation may affect scrap sales of US and EU-based suppliers and lead to some increase in billet imports in Indonesia, SteelOrbis learned from market sources.
According to the regulation issued by Indonesia’s Ministry of Trade, the scrap imported to the country should be clean, the exporter of the material should be registered in the country of origin of the scrap, and the scrap must be shipped directly. If the raw material is transhipped, it has to be re-exported, according to the document. The new regulation will be effective from November 23.
Indonesia imported 2.5 million mt of ferrous scrap in 2018, up 35 percent from 2017, according to the report of the Bureau of International Recycling (BIR), based on official trade statistics. Of this amount, about 1 million mt of scrap was from suppliers in the US and EU. Exporters from Europe managed to hike exports of scrap to Indonesia by 570 percent year on year to 496,000 mt last year. Scrap cargoes from the US and EU usually go to their neighbouring countries and then are shipped by smaller vessels to Indonesia. “Buyers are targeting scrap from closer countries now, like Singapore, Hong Kong, Malaysia, the Philippines,” a trader told SteelOrbis.
Moreover, the steel mills in Indonesia may decide to switch more to billet imports in the future, but most market participants said that this will need some time as customers need to evaluate costs and to resolve issues with recently booked scrap cargoes. “There should be an increase in billet imports, but this is not visible up to now,” a major Indonesian steel producer said.