Global Copper Scrap Market And Its Drivers

Abstract:

Generation of new quantitative data and findings of the research allowed us to improve significantly the quantity and the quality of the statistics available on international trade, use and prices of copper scrap for some key countries. Quantitative estimates of copper scrap in direct melt should contribute to improved knowledge of this market. An important achievement was to improve the understanding of the role of scrap in specific economies and semis products. The role of China, India, the Russian Federation, Japan, the EU27 scrap market and other regions in the global flow of recycled copper is now better understood and there are more figures available. The critical role played by scrap via direct melt into some semi fabricators production, in particular on brass mills and alloy products was observed. The secondary market does not show dynamic behaviour in the case of copper mine oversupply, but can play a critical role in an scenario of tight copper concentrates, limited expansion of SX-EW cathode production and sustained recovery of the industrial production, confirming the buffer role of scrap in the global refined copper market. The study of recycling policies and trade regulations affecting scrap produced useful outcomes. Regulations affecting sectors are key drivers for copper scrap recycling: electronic waste recycling is receiving increased attention, as well as automobile recycling, but more important sectors for copper such as building, construction and industrial waste recycling have not been promoted as needed. Regulatory leadership in end-of-life products recycling is moving from Europe and Japan towards China, the USA and developing economies, while Europe focuses more on high quality copper scrap regulation. In the case of the study of trade regulations we found that the use of export restrictions on scrap as a tool to promote more value added production as semis was an important finding. Also we observed that the “waste” status of copper scrap supply can work as a non tariff barrier against more international trade of copper scrap in some regions, at a time when the strict waste regulation is seldom enforced domestically. An improved knowledge of the role of the copper scrap market in relation to other copper commodities such as copper concentrate is another key outcome: the research allowed us to confirm that the availability of old scrap is directly linked to the shortage in copper concentrate markets, which has been induced by the growth in the Chinese demand. Custom smelters use more and more copper scrap together in a mix with available concentrates. Substitution between scrap and concentrate at the smelter level is a next area that ICSG should study in more detail and with more active involvement of the smelters and refineries. The same is valid in relation to the substitution between refined and scrap direct use at the level of copper and copper alloy semis fabricators. The option of developing large scale surveys in some regions and indirect input – output flows in regions where data is harder to obtain is an option to improve global knowledge on scrap use. Chinese imports are by far the major driver of this market. In consequence China scrap trade and its regulatory developments on scrap, as well as domestic enforcement of its recycling laws, are expected to be among the most important issues affecting this market in the future. ICSG knowledge of the scrap demand in China from secondary smelters has been improved, but much more remains to be done to know the metal scrap demand by small size brass plants and metal fabricating operations in China, not based on copper only.

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