Vietnam’s scrap recycling industry recorded a 202.4 percent increase in January compared to the 2019 baseline, according to Vietnam’s Industrial Production Index. However, output declined from December 2024, when production was 279.0 percent above 2019 levels.

Month-on-month, the industry contracted by 8.6 percent in January compared to December. Despite this, year-on-year data shows a substantial 40.2 percent increase from January 2024, indicating strong long-term growth in the sector.

Of note, Vietnam’s scrap recycling industry has been growing steadily, driven by the country’s increasing industrialisation, urbanisation, and growing awareness of the need for sustainable practices. The industry plays a vital role in managing waste, conserving natural resources, and supporting the country’s manufacturing sector by providing recycled raw materials, such as metals, plastics, and paper, which are essential for various industries, including electronics, construction, and packaging.

The recycling of scrap materials in Vietnam primarily focuses on metals, particularly ferrous and non-ferrous metals, such as steel, aluminum, copper, and brass. These materials are in high demand due to the growing manufacturing sector, which relies on recycled metals for producing goods like construction materials, electronics, vehicles, and household appliances. Many local recycling companies collect and process these materials to be reused in manufacturing processes, significantly reducing the need for virgin raw materials and minimising environmental impact.

Plastic recycling is also an important component of Vietnam’s scrap recycling industry. With the increasing consumption of plastic products, there is growing demand for recycling plastic waste. The country has seen a rise in the number of recycling facilities focused on processing plastic waste into recycled pellets or products. This is particularly important given the global focus on reducing plastic waste and pollution, and Vietnam has made efforts to address plastic waste management through both public and private sector initiatives.

The paper recycling industry in Vietnam is another growing segment. The demand for recycled paper, especially in packaging and printing, has been increasing with the rise of e-commerce and industrial packaging. Vietnam imports a large quantity of scrap paper from other countries to meet the domestic demand for recycled paper. The recycling of paper helps reduce deforestation and provides a sustainable source of material for the paper industry.

Despite the industry’s growth, Vietnam’s scrap recycling sector faces several challenges. One key issue is the lack of advanced recycling technologies, which can make it difficult to efficiently process certain types of waste, especially electronic waste (e-waste). Additionally, there are concerns about the environmental and health impacts of informal recycling activities, where unregulated practices can lead to pollution and unsafe working conditions.

The Vietnamese government has recognised the importance of the recycling industry and has started to implement policies aimed at improving waste management and encouraging more sustainable practices. There are also growing efforts to encourage formalisation within the sector and to improve recycling technologies, with support for businesses that invest in modern, environmentally-friendly recycling processes.