Geopolitical developments, such as potential US-China trade tariffs and regulatory changes, are creating uncertainties in the global scrap copper market.
SEATTLE (Scrap Monster): Navigating the world of copper scrap trading requires a deep understanding of market dynamics, materials and price trends. With copper being a crucial component in industries ranging from construction to electronics, its scrap market plays a vital role in supporting global supply chains.
Whether you’re an established trader or just entering the industry, this article will ensure you’re equipped with the knowledge to make informed decisions this year.
Global copper scrap market trends and outlook for 2025
The scrap copper market plays a critical role in bridging the gap between refined copper supply and demand. Here are some key trends shaping the industry:
1. Copper supply constraints
Global growth in refined copper supply is expected to lag behind demand due to challenges like limited mine expansions, environmental regulations and cost escalations. This places a greater emphasis on secondary supply sources, i.e., copper scrap. Production from scrap is projected to grow at a compound annual growth rate (CAGR) of 4.2% in the next decade, outperforming the 2.1% CAGR of primary production.
2. Geopolitical factors
Geopolitical developments, such as potential US-China trade tariffs and regulatory changes, are creating uncertainties in the global scrap copper market. Chinese buyers have already reduced imports of US origin copper scrap, impacting export dynamics. Such shifts will continue to influence global prices and trading patterns in 2025.
Since November, Chinese demand for copper scrap imports slowed significantly, influenced by uncertainty surrounding potential US tariffs on Chinese copper and aluminium imports, as well as the Lunar New Year holiday. US President Donald Trump announced a 10% levy on all Chinese imports, effective February 4, further heightening market caution.
3. Sustainability and policy support
The push for sustainable practices has led to increased efforts to promote recycling initiatives globally. Many governments are introducing favorable policies to encourage the collection and trade of copper scrap. These developments are expected to bolster the secondary copper market, further solidifying its role in the global supply chain.
4. Stable prices
While Fastmarkets’ data suggests that copper scrap prices have remained relatively stable over the past few months, predominately export-heavy grades have begun to widen as global uncertainty grows. For instance, discounts for No. 2 copper to refiners and No. 2 copper to brass ingot makers have recently decreased, despite market sources noting stable domestic demand.
Courtesy: www.fastmarkets.com
Member