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E-waste, battery and non-ferrous scrap recyclers which depend on imports were all closely watching developments, awaiting more details on the regulation. Meanwhile, regulated domestic collectors were celebrating the announcement, hoping that it would boost local recycling rates and give incentives to more investment in processing technology.
The decision, announced by the Malaysian Anti-Corruption Commission (MACC) late on Wednesday, Asia time, moves the prohibition on e-waste from “conditional” to “absolute” under Customs Order 2023. Previously, the Department of Environment (DoE) had discretion over whether to grant exemptions for certain shipments.
“E-waste is no longer allowed to enter the country. Enforcement must be carried out firmly, involving all agencies,” MACC chief commissioner Azam Baki said in a statement, noting that enforcement will involve a new coordination committee led by Datuk Nik Ezanee Mohd Faisal, the Port Klang commander of the Malaysia Border Control and Protection Agency (MCBA).
Malaysia was identified as the principal destination for e-waste and plastic waste in 2023, according to a report by the Organization for Economic Co-operation and Development (OECD) published in 2025. The shipments came primarily from the US, but also from Japan, Germany, the UK and Australia.
Prior to this, Malaysia banned the imports of e-waste in 2012 and 2017.
At this point, it remained unclear how long the moratorium on e-waste imports would last.
The government was also weighing a three-month moratorium on imports of plastic waste.
Agencies including the Ministry of Investment, Trade and Industry (MITI), the National Solid Waste Management Department and the Solid Waste and Public Cleansing Management Corporation were required to study and present to Prime Minister Datuk Seri Anwar Ibrahim the sector’s contribution to the economy and national revenue, as well as industry needs, before a final decision was reached.
Since July last year, Malaysia has steadily tightened the scrutiny on plastic waste importers, requiring stringent SIRIM certification for plastic imports.
In Malaysia, end-of-life (EOL) batteries were classified as a form of e-waste.
Malaysia was quickly emerging as a key hub for lithium-ion battery recycling in Southeast Asia, to meet rising demand for sustainable battery materials.
With a relatively developed infrastructure – especially at modern ports such as Port Klang – Malaysia was well equipped to import, export and process black mass, according to industry sources.
But the country still lacks large volumes of domestic EOL batteries, and battery shredders in Malaysia have been relying heavily on imported feedstock, trade sources told Fastmarkets.
Key market participants believed that the absolute ban on e-waste could cause disruptions to battery shredders’ feedstock supplies, leading to a squeeze in black mass supply.
While the short-term effects of the ban were still unclear, numerous sources indicated that there could be a rise in black mass payables, Fastmarkets heard.
“A drop in black mass production in Malaysia is expected now that no EOL batteries can be imported, under the new rule,” a Southeast Asia battery recycler said.
In addition to discarded parts, imported e-waste often included whole devices intended for further processing, to extract valuable metal contents, although the majority of these items were reported to be smuggled. Current import regulations on devices which have reached end of life remained ambiguous, trade sources told Fastmarkets.
“As Malaysian authorities become stricter on cracking down e-waste imports, smuggling end-of-life items into the country may still be possible, but much more expensive,” a Southeast Asian trading source said.
“This increase in the cost of bringing scrap into Malaysia will lead to higher production costs for black mass, resulting in higher payables for black mass, even if the supply of battery scrap remains stable,” the source added.
Black mass payables to Southeast Asia have already been at record-high levels over the past few weeks on firm underlying metal prices and healthy demand from buyers in mainland China, after the country raised its black mass import ban, according to market sources.
Chinese consumers have been highly competitive in their bids for high-quality black mass originating from major regional suppliers including South Korea, Southeast Asia and Japan, Fastmarkets heard.
Fastmarkets’ assessments of the black mass, NCM/NCA, payable indicator, nickel, max 5% moisture, cif Southeast Asia, % payable London Metal Exchange Nickel cash official price, and of the black mass, NCM/NCA, payable indicator, cobalt, max 5% moisture, cif Southeast Asia, % payable Fastmarkets’ standard-grade cobalt price (low-end), were both 95-100% on February 4, up week on week from 91-96% and up from 85-90% a month earlier.
Fastmarkets’ corresponding assessment of the black mass, NCM/NCA, payable indicator, lithium, max 5% moisture, cif Southeast Asia, % payable Fastmarkets’ lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea, was 0% on Wednesday, unchanged since October 15.
While the ban has become a logistical nightmare for importers, it could function as a catalyst for the building of domestic capacity, giving an incentive to local e-waste collectors to fill the void, market sources said.
One such domestic collection firm, ERTH, welcomed the new blanket regulation.
“There used to be a lot of mixing together, where a container would have both allowed and disallowed items. And because the import volumes were so large, it was impossible to police every single container,” founder Mohamed Tarek El-Fatatry told Fastmarkets.
“So we totally understand that there was a challenge in enforcement. Now, with the new ban, it is very clear, and is definitely a welcome thing for us as a regulated [participant in the market],” he added.
“There was a steady flow of illegal shipments coming into the country, and this diluted e-waste supply and diverted attention from domestic supply. So all the regulated market participants that are collecting domestically… were basically last in line… If all the recovery facilities are occupied with foreign e-waste, who is going to process our local e-waste?” he said.
“Now there will be a vacuum, and a lot of demand for feedstock. That’s where the regulated local market participants can step up and scale-up operations to fill this vacuum,” he concluded.
Market sources believed that the e-waste import ban was in line with the development of the Malaysian battery recycling industry despite the supply uncertainties it created, sector sources told Fastmarkets.
Malaysia was now a preferred location for midstream processing, thanks to its lower operating costs compared with Europe and the US, as well as its strategic position connecting Western countries to major Asian recycling hubs, according to market sources.
With capacities to process 24,000 tonnes per year of battery scrap and 12,000 tpy of black mass at its facility in Perak state, major Malaysian battery recycling company EcoNiLi Battery New Energy (EcoNiLi) intended to serve as a bridge between Western black mass oversupply and Asian demand, the company said on its official website.
Since China opened itself to black mass imports on August 1 last year, global suppliers have sought export opportunities, but strict import standards, especially the less-than-0.4% water-soluble fluoride limit, have made Western sellers cautious, Fastmarkets heard.
Many preferred to sell to Southeast Asian hubs for further processing before shipping to China, trade sources told Fastmarkets.
“Our next focus is to strengthen our position as a processing hub,” Jayden Goh, chief executive officer and founder of EcoNiLi, told Fastmarkets.
“Our hydrometallurgical process accepts black mass with fluoride content and produces specification-grade lithium carbonate and mixed hydroxide precipitate [MHP] that Chinese CAM manufacturers need,” Goh said. “We are solving Western export problems and China’s supply problem simultaneously.”
While the absolute ban on e-waste imports has dealt a blow primarily to e-waste and battery recyclers, the policy has also triggered secondary friction across the base metals complex, ensnaring aluminium and copper scrap processors in the regulatory fallout.
Many nonferrous scrap exporters have pivoted away from Malaysia in the past two years, following an update to the Standard and Industrial Research of Malaysia (SIRIM) guidelines in May 2024.
The updated guidelines require all incoming scrap cargoes to have a Certificate of Approval (COA), meaning that Malaysian port authorities would have to conduct often tedious inspections, that come with long delays.
In addition, amendments to the Basel Convention in January 2025 have created uncertainty regarding what is classified as e-waste, leading Southeast Asian authorities – particularly in Thailand and Malaysia – to adopt a stricter interpretation of the regulation.
These two factors combined have led to some shipments sitting at Malaysia’s Port Klang for nearly two years now.
Widespread container detentions and tightened customs inspections have been eroding the bottom line for Malaysian smelters, culminating in the shutdown of a major zorba processor last April.
Major ocean carriers have responded by shifting the compliance burden back to shippers. Notably, German shipping company Hapag-Lloyd will require from February onward a completed Letter of Indemnity (LOI) for all Southeast Asian scrap bookings.
Likewise, Danish shipping company Maersk has been more strictly enforcing its misdeclaration fee for cargoes with misdeclared or undeclared waste content, or cargoes that do not have the required prior informed consent.
At the time of publication, it was still unclear whether commonly flagged grades such as zorba, insulated copper wire and electric motors would be classified as e-waste by Malaysian port authorities.
Fastmarkets’ latest weekly price assessment for zorba, 98/2, cif Southeast Asia, was $2,400-2,480 per tonne on February 3, up for a fifth consecutive session and up by $480-520 per tonne from a trough of $1,880-2,000 per tonne last June.
One US exporter was unsure of the effect the regulation would have, with some market participants having avoided trade with Malaysia since tighter customs inspections began in 2025.
According to the latest data from the US Department of Commerce, US aluminium exports, excluding used beverage cans (UBCs), to Malaysia fell by 16.59% over January-November 2025, with 291,377 tonnes of exports, compared with 349,324 tonnes exported to Malaysia during the same months of 2024.
Over the first 11 months of the 2025, Malaysia took in 14.18% of US aluminium exports, excluding UBCs, down year on year from 19.53%.
Some market participants also raised concerns that the ban could squeeze Malaysia’s copper generation.
Copper’s pivotal role in the global energy transition has elevated e-waste recycling to a strategic supply-side pillar. But Malaysia’s absolute import ban threatened to sever this critical artery of secondary feedstock, potentially exacerbating regional supply deficits, market sources told Fastmarkets.
In early January, with the surge in London Metal Exchange copper futures, some Malaysian sources had already noted an increase in infrastructure theft and vandalism, where illegal operators would steal cables for their copper content.
The copper is used both domestically and sometimes exported to the main consuming countries – China, India and Japan.
Fastmarkets’ monthly assessment of the No1 copper material, RCu-2A,1B (candy/berry), cif China, LME/Comex discount, was 29-41 cents per lb on January 26, up by 3-9 cents per lb from 26-32 cents per lb on December 29 last year.
Kirstyn Petras in New York contributed to this report.
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