Indonesian government company KSO Sucofindo-Surveyor Indonesia has restarted pre-shipment inspection of import raw materials after it has been suspended on November 22, according to local sources. As a result, the imports of scrap may restart soon, though traders have been concerned about the timing and about still many uncertainties in new regulations.
Inspection of scrap orders have been stopped for three weeks and led to focus on purchases of local scrap and higher import billet bookings.
According to the regulation issued by Indonesia’s Ministry of Trade, which has been effective since November 23, 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. All these rules are in place and it will hit containerized scrap, which is usually transshipped. “Transshipment scrap ban is still there but it is said that it will be lifted soon, so trade flow will continue,” a large Asian trader said. However, a number of sources said that there will be many issues with the rule that the exporter of the material should be registered in the country of origin of the scrap. “We will trade scrap from Singapore, Hong Kong, Australia to avoid problems,” another trader said.
The restart of scrap imports will take time as trade will mostly recover after holidays, moreover, there are fears in the market that inspections will also be constrained in the near future. Most market sources believe that the trading will resume for scrap in containers, first of all, due to lower prices.
Offers for ex-US scrap in containers have increased to $270-275/mt CFR Taiwan with the highest deal prices at $268/mt CFR so far, while last week the tradable level has not been above $265/mt CFR.
Indonesia imported 2.5 million mt of ferrous scrap in 2018, up 35 percent from 2017, as SteelOrbis reported earlier. Of this amount, about 1 million mt of scrap was from suppliers in the US and EU.