Industry Veteran Foresees Normalcy in Indonesian Scrap Trade

SEATTLE (Scrap Monster): The confusions arising out of the new regulations imposed by the Indonesian administration should become clear in a couple of months. The containerized scrap shipments to the country are likely to resume by the end of H1 2020, said Phil Hoffman of Hoffman Iron and Steel.

As per the new regulations on scrap commodity imports, announced by the Indonesian government, only direct shipments will be allowed, which means that no transhipments will be permitted. The exporter must be listed on documentation. Also, the new rule sets the impurity threshold as zero.

According to Hoffman, the Indonesian Ministry of Industry has already confirmed that it will meet with the Ministry of Trade to resolve the regulatory hurdles so as to ensure normalized scrap imports. He was speaking after his recent meeting with government officials. Hoffman expressed the hope that the crisis situation is expected to blow over in a relatively short period of time. Further, he noted that it is nearly impossible to have no impurities in ferrous scrap.

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Meantime, trading activity continued to remain muted, as market participants are waiting for a clarification from the government side. The containerized trade to the country has almost dried up, said industry sources.

The projected steel demand growth on account of recently announced government projects will lend support to projected rise in scrap demand in the country.