Traces of radioactive Caesium-137 were detected in the 23 containers in Indonesia, which "rejected and reexported" them back to the Philippines, an official in Jakarta said Friday.

The containers have been sitting in Manila Bay since October 20 as authorities wrangle with the company they say the shipment originated from.

"We need to secure an (entombment) location fast," Philippine Nuclear Research Institute (PNRI) director Carlo Arcilla told AFP.

He described the situation as a "conundrum", but insisted the radiation levels detected were not serious.

"This is not a national emergency. This is a solvable problem," he said.

The contaminated zinc dust, a byproduct of steel production, was exported by Zannwann International Trading Corp after being sourced from local recycler Steel Asia, Arcilla said.

Steel Asia has temporarily suspended operations at its scrap recycling plant but slammed the PNRI's conclusions as "baseless and unscientific" and insisted "this is not our shipment".

It said it had been "unfairly singled out" because Zannwann sources zinc dust from multiple suppliers, and added that it tests all scrap metal for radioactivity.

Calls to Zannwann were not returned.

The containers were rejected by Indonesia last month as the country battled a scandal over radioactive contamination of several food products.

The US Food and Drug Administration imposed import restrictions after it said it had detected Caesium-137 in samples of shrimp and cloves.

Indonesia responded by suspending imports of scrap iron and steel, reportedly the source of contamination, until a monitoring system for radioactive materials was "fully strengthened".

Neither country has disclosed the radiation levels detected in the stranded containers.

Greenpeace Philippines campaigner Jefferson Chua warned that even low levels of Caesium-137 exposure carry "long-term cancer risks and can cause lasting environmental contamination".

The radioactive isotope, which is created through nuclear reactions, is used in a variety of industrial, medical and research applications.

The shipment likely escaped detection upon its original export from the Philippines due to a faulty radiation monitor, according to Arcilla.

He said the shipment could be temporarily kept in an "isolated" area of a military camp until an underground containment facility has been constructed.

"The main solution is to have a low-level repository, an entombment," Arcilla said, adding that a presidential decree might be necessary if provincial authorities refused to host the containment site.

The containers would remain at sea until a solution is found, he said.