Following which many of the traders and distributors from USA have widespread concern about scrap exports to Vietnam. USA scrap likely to either flow to other Asian markets or may remain in USA on stricter regulations in Vietnam.
China plans for complete ban of scrap - Vietnam has enhanced inspection of imported scrap since past few weeks after China estimated for total ban on scrap imports. So far the largest portion of recycled material and waste was heading to China, however, as customs clearance procedures for imported scrap have become complicated in China their destination has changed currently to Vietnam. Although initially tighter regulation in China have targeted a complete ban on plastic scrap, its ripple effect can be extended for ferrous scrap of all kinds in upcoming days.
Increased congestion at port - According a newspaper, presently thousands of scrap containers which are unloaded on the port and still waiting for the import and inspection procedures, are increasing risk of environmental pollution along with heavy congestion at port. ‘Cat Lai’ is the topmost port as it stacked about 3,000 scrap containers for which owner is not yet identified. This has affected operation capacities of ports and shipping companies.
Extended processing time - Over the subject of enhanced inspection and regulation for all possible imported recycled material, there occurs the backlog and delay in the processing of scrap arrived in Vietnam. According to US scrap trader, now the backlog and processing time have increased highly because customs authorities are conducting actual inspection for all containers, and an inspection of one container accommodate the backlog that is kept to 10 container earlier.
Returning of vessels - With new tightened regulations, if any kind of mixing of non-allowable part is found even in single container carrying metal scrap or any such deviation in the shape and size from given inspection criteria found then all the containers will be subjected to stricter inspections and may be returned to exporter with cost of return has to bear by scrap exporters.
The notification of the new guidelines says, "In recent years, scrap imports, procurement, and sales increased rapidly in Vietnam, there is an increasing risk of affecting pollution to the living environment. The government of Vietnam by introducing a new procedure is halting the country to become a landfill of the world ".
Mixing of spare parts with ferrous scrap - As it is easier for exporters to mix spare parts with scrap rather than to disassemble them to the separate component, lot of automobile spare parts are being mixed with ferrous scrap.
What could be its impact in global scrap market?
Currently, Vietnamese scrap buyers are not much active in the scrap procurement while sellers are also no longer willing to sell. With stricter regulations to sell in Vietnam, scrap can flow into the other Asian markets and it is likely to push down the price of Asian container market. With change in destination of imported scrap exports change from Vietnam to other Asian markets, supply will increase in other regions which will lead to fall in prices amid oversupply.