From scrap to strength: Why global aluminum scrap is flowing into Southeast Asia

Malaysia has taken the lead in this shift.  According to UN Comtrade data aluminum scrap imports jumped 18.5 per cent in a single year -- from 241.99 thousand tonnes in 2023 (worth USD 430.27 million) to 286.80 thousand tonnes in 2024, valued at USD 551.7 million. Among this United States supplied a large share, around 359,000 tonnes. By August 2025, Malaysia already imported 286.3 thousand tonnes, worth roughly USD 556 million, including 147,000 tonnes from the US in the first six months alone. If that pace holds, year-end figures are set to rise further.

Indonesia's volumes slipped 7.2 per cent, from 124.24 thousand tonnes in 2023 (USD 228.7 million) to 115.27 thousand tonnes in 2024 (USD 225 million). Still, the country continues to source heavily from the United States -- 60,000 tonnes in 2024 and 36,700 tonnes by mid-2025.

Thailand, meanwhile, is importing aggressively. It brought in 353,000 tonnes of US-origin scrap in 2024 and another 249,000 tonnes in the first half of 2025. Vietnam, though smaller, added 20,000 tonnes from the US last year and 8,610 tonnes so far this year.

From waste to industry backbone

The rise in imports marks more than just higher trade volumes -- it reflects a structural change in how and where scrap is processed. Stricter waste policies across the world have rerouted global scrap flows toward Southeast Asia. Here, there is an advantage of lower costs and  growing infrastructure, but also there is strict policies to maintain the scrap quality.

The policies are clear and uncompromising. Malaysia's Standards and Industrial Research Institute (SIRIM) enforces a zero-impurity rule for aluminum scrap imports, allowing only material with 99.75 per cent purity and no more than 0.25 per cent impurities. This ensures only clean, high-quality scrap enters the country. Thailand applies similar standards, shutting down facilities that breach environmental or quality norms to maintain strict control over processing.

Both nations also require Certificates of Approval for every aluminum scrap shipment, a move that enhances traceability, curbs illegal imports, and strengthens transparency across the recycling supply chain.

Malaysia and Thailand have become regional re-melting and pre-processing powerhouses. Imported scrap is cleaned, sorted and refined into secondary aluminum ingots that feed domestic industries or get exported to neighbours such as China and India.

The economics are clear: recycling aluminum uses about 95 per cent less energy than refining it from bauxite. For fast-industrialising economies, it's an irresistible equation -- lower costs, lower emissions, and rising value.

How automotive sector is helping the growth

The rise in aluminum scrap imports is being propelled by EV-related manufacturing growth, Chinese and Japanese companies are increasingly relocating scrap processing operations to Malaysia and Thailand. As a result, these Southeast Asian countries are functioning as secondary processing hubs, cleaning and refining imported scrap into high-quality secondary aluminum ingots for local industries and export markets.

Malaysia has extended import tax exemptions for both fully assembled and knocked-down EVs, which has driven demand for aluminum scrap -- a key input in producing lightweight automotive parts and EV battery casings. With automotive sales weakening across Europe, North America, and Japan, global carmakers are betting on Southeast Asia's growth potential. Over the past year, Chinese EV manufacturers such as BYD, Chery, Wuling, and Neta have announced plans for new production facilities across the region.

Domestic scrap recyclers

Southeast Asia's recycling infrastructure is racing to match this influx. Malaysia and Thailand are leading the investments in modern smelting and refining plants designed for imported scrap. Indonesia is scaling up as well, targeting 900,000 tonnes of aluminum output annually by 2030 -- much of it expected to come from recycled feedstock.

Across the region, recyclers have become vital to the global aluminum value chain. In Thailand, firms such as Nikkei MC Aluminum, Siam Anglo Alloy, Thai Metal Aluminum, PT Metal Trading Thailand, and AA Metal Scrap Co. Ltd are now key alloy producers.

In Malaysia, recyclers including Rajan Sdn Bhd, MTS Mega Metal, Sempurna Impex, Dragon Alliance, and Ye Chiu Non-Ferrous Metal (Malaysia) have expanded rapidly to serve both local and export markets.

Indonesia's PT Antam Tbk, traditionally a primary metals company, has also folded scrap refining into its operations -- a sign that the recycling economy is no longer a side business but part of mainstream industry.

Circular economy picture

The rise in scrap imports is helping Southeast Asia pivot toward a low-carbon future. Recycled aluminum is now deeply woven into key sectors like cars, construction, packaging, and beyond.

In construction, scrap-based aluminum is used for window frames, cladding, and curtain walls, central to energy-efficient building designs. The Asia-Pacific region already accounts for nearly half of global recycled-aluminum use in construction, and its share keeps growing as urbanisation spreads.

Packaging tells a similar story. Recycled aluminum -- used in cans and foils -- offers cost savings and purity, making it a favourite for consumer-goods producers. The global recycled-aluminum market is projected to expand by 7.6 per cent annually through 2032, with Asia leading that growth. What once arrived as waste now fuels a new manufacturing cycle that balances profit with sustainability.