Vietnam to temporarily stop accepting scrap plastic imports

Dive Brief:

A letter from Vietnam's Tan Cang-Cai Mep International Terminal (TCIT) obtained by the Institute of Scrap Recycling Industries (ISRI) notes there has been "overcapacity" at the Tan Cang-Cat Lai Terminal, causing the terminal to temporarily stop accepting scrap materials.
The letter says that, "in order to maintain service quality and facilitate import-export activities of all enterprises," Tan Cang-Cai Mep has laid out new restrictions on imports. Most notably, it will "stop receiving all import laden containers of plastic scraps from other ports to TCIT" from June 25 through October 15.
"This notice comports with rumors that Vietnamese customers had no more room for imported materials and that the build-up of containers of recovered paper and plastic scrap diverted from China were causing delays at Vietnam’s main import terminal," ISRI wrote, as reported by Plastics Recycling Update, which broke this story.

Dive Insight:

The news from Vietnam comes as yet another blow to the recycling industry in the wake of China's crackdown on scrap imports.

While companies have found new markets to export to in Southeast Asia, there is no guarantee those alternatives will remain viable over time. Earlier this month, China Scrap Plastics Association Executive President Steve Wong cautioned recyclers who are exporting materials to countries like Vietnam, Thailand and Malaysia. "Nobody can guarantee that these Southeast Asian countries will not enforce their own National Sword or certain plastic will be banned," he told a conference, as reported by Plastics News. Due to the overwhelming amount of recyclables sent to Vietnam after China cracked down on imports, it seems as though Wong's instincts were accurate.

The letter from TCIT suggests that after October 15, imports could potentially resume as normal based on operating conditions at certain ports. However, due to the volatility caused by China's restrictions, it's also possible this ban could remain beyond October.

Supply Chain Dive recently reported on the impact these bans are having on supply chains and ports across Southeast Asia, noting that many U.S. exporters have "found new clients in countries nearby China, but the new markets have not been able to keep up in terms of volume imported." During Vietnam's ban, it is likely that more of these materials will travel to India and Indonesia, though these alternative markets are not suited to be long-term substitutes for China.

The news from Vietnam is a wakeup call for the U.S. recycling market to continue pushing toward domestic solutions. Whether relief comes in the form of increased educational campaigns, new enforcement methods or the elimination of some recycling programs, the entire industry must prioritize finding solutions to this crisis in order to keep its head above water.