Shifting trends in recycled copper

The international landscape for recycled copper trading is poised for a paradigm reshuffle. As U.S. President Donald Trump strengthens protectionist measures to shore up domestic industries, some sectors have experienced volatility. In the case of secondary copper, a U.S. investigation is underway to determine whether copper products entering the U.S. will be subject to import tariffs. According to the Recycling Materials Association (ReMA), the measures would include recycled copper.

It has been challenging to sift through the actual impact of the tariffs from the ongoing political discussions. Several market participants hint that these trade legislations could yield long-term benefits despite short-term obstacles. 

In the U.S. steel market, news of proposed tariffs elevated the price of hot rolled coil (HRC) to $950/net ton from $670/net ton in December. Short-term effects have also been apparent; for example, Cleveland Cliffs laid off 630 workers after idling two plants in Minnesota due to disruptions to the automotive sector. Notably, the company's chief executive officer, Lourenco Goncalves, had supported President Trump's policies.

Even if the tariffs are not in place for non-ferrous metals, they are already bringing about supply chain disruptions. Regarding recycled copper specifically, export grades have widened to historical levels. Under the Comex next-active contract, #2 Birch-Cliff widened to $1.005/pound. Market participants have difficulty assimilating the fact that the spread discounts are now in dollar terms, not cents. The widening in grades is expected to last as long as the market volatility does.

"It looks like the tariffs have already had their impact. Comex running to $5/pound is because of the expectations that these have created," says Eddie Orensten, senior non-ferrous trader at the Alliance Recycling Group. Orensten is a metals industry veteran with decades of experience trading with recyclable materials. 

The fallout is a surge of copper material into the U.S. before the tariffs are implemented. Traders likely expect nearly 500,000 metric tonnes of the red metal to be imported. Yet that material is coming from other parts of the world where it is needed, which could create shortages in China and Europe. According to Orensten, his European counterparts noted that more recycled metal material is starting to leave Europe for the U.S.

The U.S. has a newfound reason for its increased appetite for recycled copper. In Q4 2024, German copper recycler Aurubis inaugurated a new Richmond, Georgia, facility that will process 180,000 metric tonnes of material annually. The company decided in 2022 to increase the total investment to $800 million. The second phase of operations is expected to start in 2026.

Weiland, another Germany-based company, received $270 million from the U.S.' Industrial Demonstrations Program (which aims to bolster decarbonization efforts in the country) to expand operations at its Kentucky facility. Aurubis and Weiland's efforts are expected to increase the U.S.' demand for recycled copper. These two new sites have kept recycled copper traders in the U.S. with expectations of a more stable market, price-wise, in the mid-term. 

India lifts copper imports

India has been shaping up to be a more prominent buyer as the country continues to develop; domestic copper and recycled copper supplies have been insufficient. Buyers in India keep raising their prices, although the freight to India is higher than China by 3-4 cents/pound, the need for more raw material stems from the country's growing infrastructure, reaffirms Orensten.

Domestic prices in India for copper scrap have been generally on the upturn for three years. The Davis Index for Berry is at the second-highest point at Rs836,000/metric tonne ($9,770/metric tonne). Even though it's a relatively narrower climb from Rs776,667/metric tonne in April 2022, the price dropped to Rs583,000/metric tonne in August 2022 and has been recovering since. 

The price for Armature wire (Barley) followed a similar trend when it was Rs746,333/metric tonne in April 2022 and fell to Rs565,000/metric tonne a few months later. It is near the Rs819,000/metric tonne range at the moment. 

Volume-wise, India imported 324,376 metric tonnes of recycled copper in 2024, up by six percent from 306,163 metric tonnes in 2023. Saudi Arabia was the top exporter of recycled copper to India during this period, as it exported 46,140 metric tonnes from 38,418 metric tonnes in the previous year. The U.S. exported 45,557 metric tonnes in 2024, up 19 percent from 38,418 metric tonnes in 2023. The UK followed with 32,510 metric tonnes exported to India in 2024, a decrease of one percent from 33,004 metric tonnes in 2023. Germany's recycled copper shipments were 30,448 metric tonnes in 2024, down 20 percent from 25,321 metric tonnes in 2023.

Arbitrage gains more attention

As India becomes a more prominent player and the international trading landscape is reconfigured, more and more stakeholders in the industry are becoming keen on arbitrage. Orensten thinks that new global trade routes being carved out due to the fallout of the tariffs will remain for a long time.

As Aurubis and Weiland's operations come online, more recycled copper material will likely be imported into the U.S. Moreover, Orensten reiterated that opening refineries in the U.S. could be cost-effective and provide better accessibility. "Toyota's new plant in the Carolinas will come online in 2026. This could also keep recycled copper demand strong," adds Orensten. 

The Toyota battery pack manufacturing facility in North Carolina will consume materials such as copper and feed the car maker's $10 billion Kentucky plant, its largest facility in the world. The plant produces 550,000 vehicles and 600,000 engines annually.

Buyer interest in arbitrage

"Arbitrage is the difference between two or more markets. It allows you to buy a commodity in one exchange and sell it in one of the other exchanges. The arbitrage is around 53 cents/pound, with LME being 53 cents/pound less than Comex. But less than a year ago, it didn't exist, or it was in the range of less than three cents/pound, in that type of range. This widening out to 53 cents/pound is unheard of," notes Orensten.

A new beginning

According to traders, the investigation into copper product tariffs is expected to last 30-40 days. In the meantime, China, another major player in the international recycled copper market, is poised to make a comeback with significant purchases. It remains the largest global provider of refined copper.

"China will probably be buying back in April and May, based on historical trends. The copper market has run up from around mid-March to mid-May, and you can find the high for the year during that period. There is generally a drop over the summer months," says Orensten. 

China's buying activity tends to wane in June and July and revives in September and October. The nation purchases before the summer and accumulates the material it needs. Most of China's major mill buyers have been on the sidelines in 2025.

China's anticipated improved recycled copper consumption timeline has been an ongoing discussion. However, the country has made it easier for copper smelters to export refined copper tax-free. The measure comes after domestic smelters saw their profitability plummet due to challenges in securing ore. They will now have exports to look forward to as an option. The potential U.S. tariffs on copper could be in anticipation of these latest developments.

Comex prices have been bullish, and traders expect the next active contract to reach $6/pound. The market could expect to cool quickly as more Chinese smelters settle into the exporting groove.

Ivan Lechuga is a metals market analyst at Davis Index. You can reach him at ivan.lechuga@davisindex.com.