Vietnam to restrict surging scrap imports

Vietnam has tightened control over the imports of scrap such as plastic, paper, and metals. With China banning imports of various types of scrap metal and waste products, imports into Vietnam have increased rapidly since 2017. Going forward, the Vietnamese government will only issue import licences if the importers can prove that their shipments meet the environmental standards and they have a demand and capacity to process the scrap as raw materials for their production activities.

For decades, China was one of the largest importers of waste and scrap materials. However, in the last few years, it has restricted imports on various types of waste and scrap material to reduce pollution. This has led to shipments being diverted to countries such as Vietnam and Malaysia, causing congestion at major ports.

In 2017, the total volume of scrap imported in Vietnam including iron, steel, plastics, and paper was twice that of 2016. Plastic scrap import during the first five months of 2018 is almost double compared to the total volume of imports in 2017. The rapid growth in imports has led to congestion in all the major ports in Vietnam, with around 6 000 containers stuck in Cat Lai Port and Hai Phong Port.

Apart from port congestion and environmental concerns, the major reasons for restricting imports and increasing inspections include the growing use of false permits, mislabeling of imports, and illegal imports.

The Vietnam Steel Association (VSA) has requested the government to allow steel producers to import 1.9 million tons of scrap for their industry annually. In addition, they have also proposed to extend licences of existing importers if they meet the environmental standards.

The association has highlighted the fact that steel produced from steel and iron scrap is an environmentally friendly process and produces only a fifth of the emissions compared to iron ore. Furthermore, as the domestic supply of metal scrap only meets 40 per cent of the industry demand, imports are a major source for steel producers.