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| Vietnam trade |
Vietnam scrap recycling policy is reshaping nonferrous scrap flows across Asia amid tightening trade controls and shifting global supply chains. Vietnam scrap recycling policy intensifies competition among China, Thailand, and Middle Eastern hubs for copper and aluminium scrap. Moreover, Vietnam scrap recycling policy reflects structural gaps between policy incentives and industrial readiness.
Trade Diversion and Regional Scrap Flow Realignment Across Asia
Vietnam scrap recycling policy is influencing regional scrap trade as US-China tariff escalation and regulatory tightening reshape global flows of copper and aluminium scrap. Chinese importers increasingly reroute cargoes through Southeast Asia and Japan transshipment hubs amid 125% tariff peaks and compliance risks. Meanwhile, tightening port inspections in Thailand, Malaysia, and Japan further disrupt established logistics channels.
However, Vietnam remains structurally constrained in absorbing diverted scrap volumes due to limited downstream processing capacity and fragmented collection systems. In contrast, Thailand and Japan maintain stronger logistics infrastructure and more established secondary metal ecosystems. Therefore, Vietnam scrap recycling policy generates theoretical trade opportunity but limited immediate absorption capacity.
As a result, market participants continue to question where incremental nonferrous scrap demand will relocate next. Meanwhile, potential EU aluminium scrap export levies scheduled for 2026 add further uncertainty to global supply allocation. However, Middle Eastern and South Asian routes remain emerging alternatives but lack scale and financing depth.
Vietnam Incentives, EPR Reform, and Structural Industry Constraints
Vietnam scrap recycling policy combines fiscal incentives, EPR reform, and regulatory tightening to formalize its recycling industry. The revised Corporate Income Tax framework provides a 10% preferential rate for recyclers over 15 years and 17% for energy-saving manufacturers. Meanwhile, battery recyclers can access annual support packages of up to $800,000 under Decision 21/2025.
However, structural fragmentation continues to limit industrial scalability across the Vietnamese scrap ecosystem. Vietnam relies on imports for over 70% of critical steelmaking raw materials including iron ore, coking coal, and scrap. In contrast, only 35–54 formal recycling companies operate alongside more than 4,000 informal craft village processors.
As a result, environmental compliance risks and inconsistent feedstock quality constrain expansion of secondary metallurgy. Meanwhile, Decree 110/2026 introduces mandatory recycling rates for aluminium, steel, batteries, and electronics under an expanded EPR framework. Therefore, Vietnam scrap recycling policy attempts to shift the market toward regulated circular economy compliance.
Aluminium and Copper Market Imbalance Under Weak Downstream Demand
Vietnam scrap recycling policy faces demand-side constraints despite rising regional scrap availability and investment interest. Aluminium scrap processing capacity reaches approximately 700,000 tonnes annually, while domestic ADC12 demand remains near 120,000 tonnes. Meanwhile, domestic production supplies only about 60,000 tonnes of this requirement.
However, intense regional competition drives import pricing pressure from China, Thailand, and Malaysia for limited qualified scrap grades. In contrast, copper recycling remains significantly underdeveloped due to stricter import licensing and weaker industrial scale. Therefore, secondary copper growth lags behind aluminium despite rising electrification demand.
As a result, Vietnam struggles to establish itself as a dominant nonferrous scrap processing hub in Asia. Meanwhile, Chinese ADC12 oversupply and weakening EV-linked demand further distort regional aluminium alloy trade flows. However, Thailand continues to strengthen its position as a more mature and scalable recycling hub.
ScrapInsight Commentary
Vietnam scrap recycling policy demonstrates a classic mismatch between regulatory ambition and industrial readiness in emerging recycling economies. Meanwhile, capital and scrap flows continue to consolidate in more mature hubs such as Thailand and the Middle East. As a result, Vietnam’s role in regional nonferrous scrap trade will likely remain transitional unless downstream demand accelerates materially.
