Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The government of Indonesia has placed a temporary suspension on all scrap imports with an inspection date after 22 November as the government finalizes and step in to implement the new import regulations. The participants and implementing agencies found themselves unprepared as the policy seems restrictive as to potentially halt trade.


KSO-Sucofindo – the government agency responsible for overseeing its implementation, including pre-shipment inspections, has cancelled all inspections beyond November 22 notifying the last inspection date as the November 22, putting a temporary halt on all inspections until further notice, as no transshipments are allowed according to the document available with Davis Index.    


While the pre-shipment inspection agencies, including Cotecna in the United States, has also informed its customers that to stop all transshipments to Indonesia forcing many of the traders to divert their cargoes to other destinations, Davis Index learned. Institute of Scrap Recycling Industries ISRI has asked U.S. Government officials in Washington and Jakarta to help them with more clarity and help to solve their concerns with the new rules.  


New regulations

1. Only direct shipments will be allowed, defined as direct from the United States to Indonesia. For example, no transshipment via Singapore.

2. The exporter must be listed on documentation so that the exporter can occasionally be verified.  And the exporter can only send from their own country.  

3. The government may be considering prohibiting shipments from brokers and traders – that material can be sourced/exported only from processors.

4. The impurity threshold may still be at zero however, few participants have contradictory opinion as the impurity’s threshold would be 2% at the outset and transition to 0.5% in two years.

5. Scrap imports in the country will be limited to arrive at eight ports: Tanjung Priok in Jakarta, Tanjung Emas in Semarang, Tanjung Perak in Surabaya, Soekarno Hatta in Makassar, Belawan in Medan, Batu Ampar in Batam, Teluk Lamong in Surabaya and Peacock in Cilegon.


The scrap items under the regulation are classified into separate groups, with various scrap metal items like ferrous, aluminum and copper scrap categorized as waste and subject to comply with the new import regulations, effective from today, establishing provisions on the import of hazardous and toxic materials as industrial raw materials.

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