China’s Copper Scrap Shortage: A Story of Clean‑Air Cuts and Market Hiccups
Picture this: a city of mega‑skyscrapers, bustling factories, and a government‑wide effort to make the air smell like fresh bread instead of fumes. China’s ambitious anti‑pollution campaign has hit a snag—its own copper supply chain.
The “Waste” Trap
For years, China has been chopping off imports of what it calls “waste.” Think of it as the country’s version of a strict trash policy. Copper scrap, which was once a favourite for recyclers, has now been earmarked as unwanted trash.
In a bold move at the end of last year, Beijing even announced a full ban on copper scrap imports—mirroring its switch on other plastics and junk plastics. That sounded great in theory, but the move hit a major hiccup: the domestic copper industry was scrambling to keep its supply lines intact.
Relief? Reluctant and Ribbed
Under pressure from worried copper producers—who were freaking out over losing a big chunk of their raw material— the government pulled back. Today, high‑grade copper scrap has been re‑classified from “waste” to “resource.” This little change means almost the same things: “we’re not shooting down scrap any more, we’ll use it again.”
COVID‑19’s Unintended Side‑Effect
- Factory sit‑downs: Lockdowns caused factories and small businesses to pause, which in turn shut down the production of new scrap.
- Cooler prices: A slump in copper prices turned old scrap from a profit‑maker to a storage chore.
- Scarce “resources”: Even the newly carved “resource” stock is currently a precious commodity.
Will the Gap Close?
Under normal circumstances, if China’s copper scrap imports dipped, they would spring back to make up for the missing supply. But the global pandemic has thrown that pretty neat cycle into rough water.
So, while the clean‑air mission is still a top priority, China finds itself in the middle of an irony: the plan to reduce pollution has knocked out a key source of copper that would have helped keep the economy humming.
What Happens Next?
Industry experts say the solution could be as simple as learning to recycle smarter and ignoring the old “waste” label. They’re also watching for how the global market will rebound as lockdowns ease.
Check in – the next round of copper scrappers might just include a few giggles and a lot of resilience!
Minding the gap
China’s Copper Scrap Import Saga
From a 2017 Buffet to a 2024 Diet
In 2017, China was feasting on 3.6 million tonnes of copper scrap, then reduced it to 2.4 million tonnes in 2018. Fast‑forward to last year, the banquet shrank to just 1.5 million tonnes, and by early 2024 it’s a measly 210,000 tonnes. Those numbers read like a cook‑down of a once‑plentiful grocery list.
High‑Purity: The New Gold Standard
- Export restrictions mean the scrap that does arrive is pure‑bred—average copper content jumps to 78 % last year, compared to a slim 40 % before 2018.
- While cleaner, the reduced volume still leaves a gap of a few hundred thousand tonnes of contained metal that the local industry can’t match.
Lobbying Success: “Resource” Scrap Gets a Pass
Chinese processors, not content to sit on the sidelines, mobilised opinion in Beijing and secured an exemption on high‑grade scrap from the looming ban—essentially a survival cheat code for the smelting sector.
The Pandemic Double–Whammy
COVID‑19 hasn’t just halted factory production; it’s also choked the supply chain:
- Mine shutdowns reduce concentrate deliveries.
- Reduced domestic scrap generation adds to the crunch.
Jiangxi Province’s “Scrap Revitalisation” Pitch
Local officials promise to revival the scrap import quotas and roll out the numbers to actual processors, aiming to bring the industry back to its former glory.
Trump‑Style Tax Hike Hits the Road
Beijing recently shut down a 25 % import tax on U.S. scrap for one year, giving the once‑stalled trade route a much‑needed lifeline.
Will the New Rules Reset China–U.S. Trade?
It remains to be seen whether these changes will resurrect trade between the world’s biggest economies, but the industry’s adaptive spirit keeps hoping for a brighter, copper‑rich future.
Malaysia the new copper scrap hub
From China to Malaysia: The Copper Scrap Shuffle
Long story short: China’s cargo‑gate for US copper scrap has slammed the brakes, while Malaysia’s got a front‑row seat.
What happened in China?
- Imports of high‑purity US copper scrap plummeted from 352,000 t in 2018 to 89,000 t last year.
- Those shipped had an outstanding ≈90 % implied copper content, making them super‑clean.
- But they didn’t stick around. Every major shipment in Q3 2023 brushed through customs with a “processing with imported material” tag—no real impact on China’s local scrap scene.
Where did the scrap go instead?
- The U.S. started offloading its low‑grade scrap to Malaysia instead of setting foot in China or Hong Kong’s “back door.”
- Exports to Malaysia exploded: 120,000 t in 2018 → 221,000 t last year (think: almost double). Look back to 2015, when the flow was a modest 613 t.
- Those Malaysian shipments had only about 31 % copper content—the lowest among top‑10 partners.
Malaysia’s makeover magic
- Local processors strip, clean, and purify this raw material, turning it into a product that meets China’s stringent “resource” standards.
- Last year, Malaysia supplied 18 % of China’s total copper scrap imports and managed an impressive ≈89 % copper content in the final product.
- In essence, the U.S. continues to ship copper scrap, but it’s doing so through Malaysia, masking the route and sidestepping China’s new trade policies.
What does this mean?
China’s duty waiver has shifted the global supply chain. The trickster route through Malaysia likely won’t change, and it’s a clever way to keep the scrap flow humming while tightening controls.
Scrap Balancer
Why Scrap Is the Hidden Hangman of the Copper Market
Scrap metal often plays the quiet balancing act that keeps copper prices from turning into a wild roller‑coaster. When spare copper flows in too fast and prices skim low, the market politely asks for the cheap, recycled version of the metal instead.
Price Drop: A Direct Hit on Scrap Supply
Thanks to the COVID fairytale that took London by storm, copper prices fell like a dropped phone: from a January zenith of $6,343 per tonne down to a sluggish $5,315. That sharp dip isn’t just a headline number; it saps the motivation for people to toss their old wires and reels into the scrap bins.
Lockdowns: The Silent Screamer of the Supply Chain
While some markets thought “virus was just a buzzword,” lockdowns actually froze entire national scrap‑collection networks. The usual hustle—pick up old copper, ship it across borders, hand it over to smelters—was put on pause. And international trade? It took a cue from “Let’s cut the cord.”
China Says: “We’re Back, But Where Did the Scrap Go?”
As China rolls out the red carpet for copper imports (even pulling in scraps from the U.S.), the answer is a quick, “Where’s the stockpile?” The scrap supply is thinner than a paper airplane at a windstorm. The gap will take time to close, because the Chinese smelters ready to grope for fresh supply have already been wrangling with new entrants while older players vied for the same raw material.
Concentrates: The New Relic of Demand
- Concentrates are falling short. Before COVID, smelters were already stretched thin pulling enough coal‑rich material. The virus added a rocket‑launch of supply disruptions, especially from key exporters like Peru.
- Missing Concretes translates to a harbinger. The lingering scrap vacancy creates a fierce shift towards refined copper to make up for any domestic loss.
- Fibers of industry office: Fabricators who love a balanced mix of scrap and metal now need more refined pieces to finish their production lines.
Policy Moves: Taipei Sticks the Ticket
Balancing the arts in the copper game isn’t easy, yet the Beijing policy update makes it crystal clear: China intends to plug this gap head‑on. Expect more aggressive smelter expansion, tighter trading controls, and a steady‑hand approach to keep the copper market humming.
In short, scrap might not shout in the market, but its quiet pull keeps copper under our control—much like a good friend holding your hand during a freak snowstorm.
