[SMM Tungsten Express] Japan's response to China's tungsten export controls demonstrates that supply chain restructuring can effectively hedge geopolitical risks. After China imposed tungsten export controls in February 2025, Japan quickly pivoted to tungsten scrap from the US, Singapore and Europe, with US scrap exports to Japan surging 24-fold in Q1 2026. Major producers have initiated expansion plans: Mitsubishi Materials invested ~$64 million to expand recycling capacity in Japan and Europe, while Sumitomo Electric invested $100 million in a new plant expected to boost tungsten supply capacity by ~50% by 2028. The Japanese government is advancing public-private supply chain reform through its Economic Security Promotion Act and JOGMEC. This case underscores that critical minerals dependence is not merely a commercial issue but a strategic risk, accelerating efforts to build resilient supply chains.

[SMM Steel] Japan exported 2.35 million mt of ferrous scrap in January-April 2026, down 9.9% year on year, while April exports fell 10.1% YoY to 667,678 mt. Vietnam remained the largest importer of Japanese scrap during the period, importing 1.02 million mt, down 10.1% YoY. Bangladesh imported 516,219 mt, up 22.3%, while South Korea imported 350,019 mt, down 17.9% YoY. Meanwhile, Japanese scrap exports to Thailand more than doubled to 173,869 mt during the four-month period.

The global copper scrap market is entering a period of structural tightening as geopolitical tensions and industrial policy increasingly reshape trade flows. The relationship between the United States and China sits at the center of this transition, particularly as Washington considers restricting exports of high-quality copper scrap in 2027 while China remains heavily dependent on imported secondary copper feedstock. China’s copper scrap imports remained strong in 2024 at 441,080 MT, underscoring continued demand from secondary refiners serving the EV, renewable energy, power grid, and manufacturing sectors. However, imports have collapsed in 2025 to 143,271 MT, with current projections for 2026 falling further to just 5,305 MT. The sharp decline signals a rapid deterioration in China’s direct access to imported scrap feedstock amid rising geopolitical friction and tariffs. China’s existing 10% tariff on US-origin scrap has already reduced the competitiveness of direct shipments, although clean high-grade material has continued to move because of favorable processing economics. Trade flows indicate that copper scrap is increasingly being rerouted through Southeast Asia rather than moving directly from the United States into China. US copper scrap exports to ASEAN rose from 170,687 tonnes in 2024 to 222,993 tonnes in 2025, while Chinese imports of copper scrap from ASEAN increased from 434,176 tonnes to 529,345 tonnes over the same period. The correlation strongly suggests ASEAN is emerging as a critical intermediary hub for scrap aggregation, processing, blending, and re-export into China. This shift reflects a broader restructuring of the global scrap trade as market participants adapt to tariffs, geopolitical risk, and the growing probability of tighter controls on high-quality US scrap exports. Countries such as Malaysia, Thailand, and Vietnam are increasingly functioning as alternative routing channels within the global secondary copper supply chain. The timing is significant because the United States continues to export around 1 million tonnes of copper scrap globally in 2025 while domestic secondary refinery production remains limited at approximately 50kt. This imbalance is becoming central to the policy debate in Washington. As US demand for copper accelerates through grid modernization, electrification, AI-driven data center expansion, and defense manufacturing, policymakers are increasingly questioning whether high-grade recyclable copper should continue flowing overseas while the US remains dependent on imported refined copper. Current policy discussions focus on retaining a larger share of premium copper scrap within the domestic market beginning as early as 2027. Although proposals currently stop short of a full export ban, any retention mechanism would still materially reduce export availability for high-quality grades such as bare bright copper and No.1 copper scrap. For China, tighter access to premium scrap has important implications beyond the secondary market. High-quality scrap directly competes with refined copper cathode because it offers high recovery rates with lower processing intensity than primary smelting. If imported scrap availability continues to tighten, Chinese refiners will likely need to increase refined copper purchases to maintain output levels. This dynamic could become increasingly supportive for refined copper markets globally. The primary copper market is already facing structural constraints from weak mine supply growth, declining ore grades, permitting delays, and years of underinvestment in new projects. A simultaneous tightening in high-grade scrap availability would amplify pressure on refined copper balances precisely as demand linked to electrification continues to strengthen. As a result, the market could see narrower scrap discounts relative to cathode, firmer copper premiums in Asia, and increased volatility across both COMEX and LME pricing. The secondary copper market is therefore becoming an increasingly important variable in the broader refined copper outlook. Ultimately, the copper scrap market is no longer operating purely on economic arbitrage. Strategic resource security is becoming a defining driver of trade flows and policy decisions. The rapid growth in ASEAN intermediary trade, combined with collapsing direct Chinese scrap imports and growing US policy intervention, signals that the global copper supply chain is entering a new phase of fragmentation — one that is likely to tighten both scrap and refined copper markets into 2026 and beyond. Author: Shairaz Ahmed, Principal Market Analyst For more information or to discuss market dynamics, you can contact me on shairazahmed@smm.cn

[SMM Steel] US iron and steel scrap exports rose 62.7% MoM and 48.4% YoY to 1.38 million mt in March 2026, according to the US International Trade Commission. Turkey remained the largest buyer with 461,126 mt, up 77.7% from February. Other major destinations included Mexico with 262,586 mt, Peru with 114,406 mt, and Italy with 105,463 mt. Export value increased to US$669.24 million in March from US$426.75 million in February.

Kazakhstan has officially extended its ban on the export of ferrous scrap by rail and road for another six months. The measure is intended to ensure a stable supply of raw materials for domestic steel producers as they ramp up production to meet national infrastructure goals. Regional billet prices rose by $10–15 per ton following the announcement.

Despite rebounding copper prices, Asian spot scrap supply remains tight, with pricing coefficients unexpectedly firm (Bare Bright holding around 98.5%). Concurrently, Western spot offers are shrinking. As the Aurubis Richmond smelter absorbs ~180,000 tonnes annually and US domestic cable shredding capacity rapidly expands, both the volume and quality of US scrap exports to Asia are declining. This structural shift is slashing transoceanic trade, accelerating the era of "regional circulation" for recycled copper. Currently, the squeeze primarily hits intermediate traders with sluggish volumes, while downstream end-consumers report limited immediate impact.