n° 162 – September/October 2019

The Malaysian government recently announced US$ 5.62 billion of US investment within the first six months of 2019 compared with US$ 113 million in the previous year - a clear sign global firms have become increasingly concerned with the long-term effects of the US/China trade dispute. Many economists familiar with the region say Indonesia, Thailand, Vietnam and Malaysia are likely to be the largest beneficiaries from this immense shift.

Since the previous Mirror, many questions have remained unanswered regarding the policy implemented by China’s environmental ministry on July 1. The ministry issued import permits/quotas for approximately 240,000 tonnes of copper and 55,000 tonnes of aluminium for the third quarter. As of the third week of September, very few (if any) fourth quarter import quotas for approved copper or aluminium have been issued. It has been rumoured that less than 50% of the allotted quarter three quota will be available for the fourth quarter. This could be crippling for metals producers within China while creating dynamic markets within South East Asia.

The rebalancing of the global scrap trade has continued as the US/China trade conflict persists in affecting our markets. US customs officials report that America’s aluminium exports to Malaysia went from 1000 tonnes in 2013 to 180,000 tonnes in 2018, with the total expected to surpass 200,000 tonnes in 2019. US copper scrap exports to Malaysia have witnessed similar increases, exceeding 120,000 tonnes in 2018. Other surrounding regions continue to experience increased imports but, at present, they collectively still amount to a small fraction of the past processing capacity of China.

With a vast surplus of non-ferrous scrap resulting from the lack of global processing capacity and with global trade tensions weighing heavily on major world economies, this will keep pressure on our terminal metal markets and therefore on scrap prices for the near future.

Darrell Wong - Darrell Wong (South East Asia)

Darrell Wong

Liberty Iron & Metal, Inc. (USA), Board Member of the BIR Non-Ferrous Metals Division

South East Asia
n° 162 – September/October 2019