U.S. refined copper stocks rose sharply while scrap exports climbed above 1 million tonnes, prompting market focus on forthcoming tariff policy risks and supply-chain volatility.

【SMM Scrap Aluminium Market Analysis】Southeast Asia's Secondary Aluminum Industry Trapped in "Margin Squeeze": Raw Material Surge Forces ADC12 Plant Cuts, Industry May Enter "Lunar New Year Mode" Early February 2026 marked a period of unprecedented regulatory volatility for the global secondary aluminum and scrap markets. Driven by a confluence of tariff upheavals, aggressive decarbonization mandates, and stringent environmental crackdowns, the traditional flow of aluminum scrap is being fundamentally redrawn. As the United States implements sweeping new import surcharges, the European Union weighs restrictive export measures, and Southeast Asian hubs like Malaysia tighten their borders against contaminated materials, market participants are facing mounting compliance costs and disrupted arbitrage windows. This review examines the key policy shifts that defined the ex-China aluminum recycling sector this month and their immediate implications for global trade flows. The United States: How the 10% Surcharge Disrupts Secondary Aluminum Following the United States Supreme Court’s ruling, which invalidated Trump’s IEEPA tariffs on February 20, 2026, many trade goods found themselves navigating a complicated and chaotic new regulatory landscape. Within hours of the ruling, President Trump pivoted to Section 122 of the 1974 Trade Act, levying a 10% blanket global import surcharge that went into effect on February 24, replacing the former country-based tariffs. There have also been threats made by President Trump to raise this surcharge to the statutory maximum of 15%, which could further disrupt global trade and U.S. imports. Even though most primary aluminum products will not see a huge change due to already being burdened by the 50% Section 232 tariffs, the secondary aluminum market, which formerly enjoyed a 0% tariff under Section 232, might now be caught in the newest 10% blanket import surcharge. The US Geological Survey’s Mineral Commodity Summaries 2026, published in February 2026, estimated an increase in imported scrap into the US in 2025, reaching roughly 890,000 metric tons, which is approximately a 27% increase compared to 2024. Even though scrap imports only make up roughly 20% of the US’s total scrap consumption, a blanket import surcharge will likely affect a significant portion of total scrap imports for the active period of the Section 122 policy. This is especially true as the policy remains highly volatile and faces the risk of being increased or challenged in the near future. Europe: The "Scrap Leakage" Debate and Impending Export Controls The EU aluminum recycling sector is also on edge following the closure of the EU’s public consultation in late January. Currently, trade measures are widely expected to be unveiled and launched during Spring 2026, aimed at curbing what the EU terms "aluminum scrap leakage." European Aluminum, as one of the biggest supporters of trade measures to control scrap leakage, cites outflows exceeding 1.3 million tons annually that could instead be utilized domestically to meet decarbonization and net-zero targets. In February, the Bureau of International Recycling (BIR) released statements opposing these trade measures, stating that "the imposition of export restrictions or trade barriers is fundamentally unnecessary and risks producing significant unintended consequences for the entire value chain." BIR also explained how its own monitoring fails to identify scrap leakage issues, noting that the EU currently has insufficient domestic smelting capacity to absorb the extra scrap that is being exported out of Europe. In the same statement, BIR warned of a probable reduction in domestic aluminum scrap prices and a decline in the overall quality of waste management systems. Similarly, in 2025, the European Recycling Industries' Confederation (EuRIC) published stark warnings against the possible restriction of aluminum scrap exports. In a scenario where all grades of aluminum scrap are restricted from being exported, or if exports are hit with a significant surcharge, the Asian market, especially China, India, and Southeast Asia, all of which are large importers of EU scrap would be heavily impacted. Supply would see significant decreases, and prices outside Europe might climb to new highs as markets adjust to fill the gap, while secondary prices within the EU could drop to new lows due to localized oversupply. Malaysia: The E-Waste Crackdown and Stringent SIRIM Enforcement Following the success of "Ops Metal" in 2025, Malaysia has seen a massive volume of illegal scrap imports seized, amounting to a total value of RM 7 billion. In response to the influx of illegal scrap imports frequently mixed with electronic waste, the Malaysian government implemented an absolute e-waste import ban effective February 4, 2026, in order to curb these environmental violations. While aluminum scrap is still legally allowed to be imported into Malaysia, albeit under strict SIRIM purity requirements, the absolute e-waste ban will inevitably affect certain secondary grades. Notably, Zorba imports will likely see significant increases in transit and processing times, as customs officials are now far more likely to detain such cargoes for exhaustive inspections due to the high probability of e-waste contamination. In the broader picture, the volume of aluminum scrap legally entering Malaysia will likely decrease. Coupled with escalating processing delays at customs, this friction increases the probability that businesses will actively divert their aluminum scrap trade elsewhere in Southeast Asia, such as to Thailand. Conclusion Looking ahead to the second quarter of 2026, the secondary aluminum market will likely remain in a state of flux as these regional policies take full effect. The era of frictionless global scrap trade is rapidly giving way to a localized, highly regulated environment. For remelters and traders, navigating this landscape will require extreme supply chain agility and a hyper-focus on material compliance. As European supply risks being politically landlocked, U.S. raw material imports become suddenly more expensive, and Southeast Asian quality barriers rise, we expect to see continued volatility in regional premiums and a widening decoupling of traditional scrap-to-LME pricing mechanisms in certain regions. Adapting to this fragmented reality will be the defining challenge for the industry in the months to come.

According to SMM data, the monthly copper scrap exports from the US in April 2025 were 78,000 mt. Among them, Thailand became the largest export destination for the US, accounting for 18.83%, while China slipped to the second position, accounting for 15.82%.

SMM data shows: In April 2025, the US monthly copper scrap exports amounted to 78,000 mt. Among them, Thailand became the largest export destination for the US, accounting for 18.83%, while China slipped to the second largest, accounting for 15.82%.

At the 2025 SMM (2nd) Global Renewable Metal Industry Chain Summit - Main Forum hosted by SMM Information & Technology Co., Ltd., Allen Cui, Director of SMM Nonferrous Consulting, shared insights on the topic of "Prospects for the Development of the Global Secondary Metal Industry."

On the 28th local time, OPEC+ held an online meeting. Early this morning, according to the latest news from Bloomberg, based on the statement released after the meeting, OPEC+ has agreed to use the 2025 oil production level as the benchmark for 2027. Meanwhile, OPEC+ will authorize the OPEC Secretariat to develop a mechanism to assess the maximum sustainable production capacity of participating countries, which will serve as a reference for the 2027 production benchmark. The next Joint Ministerial Monitoring Committee (JMMC) meeting of OPEC+ will be held on November 30th. OPEC+ will also hold another round of negotiations this Saturday, when it may decide whether to increase production in July. Representatives said that the eight OPEC+ member countries attending the meeting on Saturday may agree to increase daily production by 411,000 barrels in July, in line with the production increases in May and June. In addition, according to CCTV News, on the 28th local time, US President Trump stated that he had warned Israel to refrain from attacking Iran for the time being, so that the US government could have more time to promote a new nuclear agreement with Iran. Trump said he believed that Iran wanted to reach an agreement, which would "save many lives," and that the agreement could be reached "within the next few weeks." Trump also expressed his desire to bring inspectors to Iran. Overnight and into the early morning, international oil prices continued to rise. WTI crude oil futures rose by 2.5% to $62.41 per barrel, while Brent crude oil futures rose by 2% to $64.85 per barrel. At the close, WTI crude oil futures closed up 1.56% at $61.84 per barrel. Brent crude oil futures closed up 1.26% at $64.90 per barrel. US Fed releases minutes of May interest rate-setting meeting According to CCTV News, on May 28th local time, the US Fed released the minutes of the Federal Open Market Committee's meeting held from May 6th to 7th. The minutes showed that the Fed agreed to maintain the target range for the federal funds rate between 4.25% and 4.5%. Participants unanimously agreed that when considering the magnitude and timing of further adjustments to the target range for the federal funds rate, the Committee would carefully assess subsequent data, the changing economic outlook, and the balance of risks. The minutes stated that when assessing the appropriate stance of monetary policy, the Committee would continue to monitor the impact of future information on the economic outlook. Participants said that the assessment would take into account a wide range of information, including labour market conditions, inflationary pressures and inflation expectations, as well as financial and international developments. The Committee assessed that uncertainty regarding the economic outlook had further increased. Participants pointed out that if inflation persists while the outlook for economic growth and employment weakens, the Committee may face difficult trade-offs. The final magnitude of adjustments to government policies and their impact on the economy remain highly uncertain. Against this backdrop, all participants agreed that it was appropriate to maintain the target range for the federal funds rate at 4.25% to 4.5%. When considering the outlook for monetary policy, participants unanimously believed that, given the continued resilience of economic growth and the labour market, the Committee was well-positioned to wait for greater clarity on the outlook for inflation and economic activity. It was appropriate to adopt a cautious approach until the net economic effects of a series of government policy adjustments became clearer. Glencore makes significant purchases of Russian copper on the LME On Tuesday, Bloomberg reported market news that over the past three trading days, the London Metal Exchange (LME) Rotterdam warehouse had received delivery requests for approximately 15,000 mt of copper, leading to a significant decline in LME copper inventories. The report stated that Glencore, a global commodity giant, was the main trader behind these cargo pick-up applications and was planning to ship the copper to China. Notably, a substantial amount of Russian copper was involved in the transactions. It is understood that since the full-scale outbreak of the Russia-Ukraine conflict in 2022, escalating sanctions imposed by Europe and the US on Russia have led to a continuous accumulation of Russian copper inventories on the LME. In April 2024, the US and the UK announced new trading restrictions on Russian aluminum, copper, and nickel, including prohibiting the LME and the Chicago Mercantile Exchange (CME) from accepting newly produced Russian metals, while allowing eligible metal inventories. What are the implications? "After the US and the UK imposed sanctions on Russian copper in April 2024, Russian copper accounted for over 50% of the copper inventories in LME European warehouses, while China became one of the major export destinations for Russian copper following the sanctions," Zhang Weixin, a non-ferrous metals researcher at China Securities Futures, told reporters. After Russia and Ukraine resumed negotiations and proposed a ceasefire framework in May this year, Glencore may be betting on a relaxation of US and UK sanctions on Russia. Against the backdrop of warming spot demand in China, high premiums for imported copper, and the potential easing of US and UK sanctions on Russia, if Glencore resumes trading in Russian copper, it is expected to alleviate the "copper shortage" situation in the market. The reporter learned that in March this year, US copper prices surged to $11,633/mt, with a premium over LME copper reaching as high as $1,570/mt. Gu Fengda, chief analyst at Guosen Futures, stated that the high premium for US copper directly spurred a frenzy of "trans-oceanic arbitrage" and attracted a continuous influx of global spot copper into the US, further exacerbating the supply-demand mismatch across regions. Currently, the premium for US copper over LME copper stands at $683/mt, still significantly higher than the historical average for the same period. "With the favorable performance of copper fundamentals and the flow of some spot copper to the US, expectations of tight copper supply in markets outside the US continue to grow, which is also an important reason for Glencore's significant purchases of Russian copper this time."As spot liquidity tightens, LME copper's term structure may remain strong," said Xianfei Ji, a nonferrous metals researcher at Guotai Junan Futures. Data shows that since late April, LME copper inventories have continued to decline. This week, the destocking pace of LME copper inventories accelerated further, currently pulling back to 154,300 mt, hitting new periodic lows. Meanwhile, LME copper registered warrant quantities declined in tandem, now retreating to 83,125 mt. Cancelled warrants stood at 71,175 mt, with the ratio of cancelled warrants at 46.13%, remaining at elevated levels. Domestically, Weixin Zhang noted that due to the US "Section 232 investigation" on critical minerals, global commodity trading giants have diverted copper originally destined for Asia to the US, even relabeling Chilean Antofagasta copper ingots with US standards. This caused delays or cancellations of China's imported copper long-term contracts scheduled for April and May arrivals, driving up spot copper premiums in China and creating tight spot supply conditions. "Glencore's potential import activities could help alleviate China's copper supply tightness," said Yunfei Wang, head of the investment consulting department at ShanJin Futures. Currently, global copper cathode inventories are at median historical levels, while domestic copper inventories remain at historic lows. From price spread performance, the US copper premium over LME copper remains high, but with intensified price volatility, market divergence is gradually emerging. Policy-wise, after the US "reciprocal tariff" policy implementation was postponed, the market expected accelerated US copper scrap exports and increased raw material supply. However, domestic TC prices show no signs of raw material supply improvement yet. Inventory-wise, as of the week ending May 28, the US copper inventory buildup trend paused, while domestic social inventory also showed stabilization signs. Overall, Wang believes the US copper "arbitrage wave" may reverse at some point, creating downside potential for copper prices, though no reversal signals have appeared yet. Ji noted investors should closely monitor whether Trump will impose 25% additional tariffs on imported copper. If tariff hike expectations keep getting priced in, it may sustain high price spreads between US and LME copper, with South American and other regional supplies continuously diverted to the US, leaving other regions persistently undersupplied. "Short-term, under current spread structures, changed global copper trade flows seem only a matter of time," Wang stated. Medium and long-term, the copper market's focus remains on copper ore supply conditions and demand outlook.

The latest data from the General Administration of Customs (GAC) indicates that in April 2025, China's imports of copper scrap and shredded copper scrap showed a trend of "MoM recovery but YoY contraction," with monthly imports reaching 204,700 mt, up 7.92% MoM but down 9.46% YoY. From January to April, cumulative imports totaled 777,000 mt, a slight YoY decrease of 0.81% (HS code 74040000).

Data from March to April showed that US copper scrap exports to China exhibited a "double decline" pattern: In March, exports stood at 22,500 mt (down 28.41% MoM and 51.51% YoY), with its market share in China dropping to 11.85% and its ranking falling to second place. In April, although exports increased slightly by 4.98% MoM to 23,600 mt, they still fell sharply by 43.98% YoY, with its market share further shrinking to 11.52% and its ranking being overtaken by Thailand, slipping to third place. In stark contrast, the Asian supply chain has risen strongly. Japan's exports to China reached 32,700 mt in April, up 21.02% MoM and defying the trend with a 13.78% YoY increase, securing the top spot with a 15.96% share. Additionally, in the Thai market, exports for the month reached 25,000 mt, surging by 26.9% MoM and soaring by 60.98% YoY, propelling Thailand to become the second-largest supplier. The synergy within the Asian regional supply chain is becoming increasingly prominent.

Data from March to April showed that US copper scrap exports to China exhibited a "double decline" pattern: In March, exports stood at 22,500 mt (down 28.41% MoM from February and 51.51% YoY), with its market share in China dropping to 11.85% and its ranking falling to second place. In April, although exports increased slightly by 4.98% MoM to 23,600 mt, they still fell sharply by 43.98% YoY, with its market share further shrinking to 11.52% and its ranking being overtaken by Thailand, slipping to third place. In stark contrast, the Asian supply chain has risen strongly. Japan's exports to China reached 32,700 mt in April, up 21.02% MoM and 13.78% YoY against the trend, securing the top position with a 15.96% share. Additionally, in the Thai market, exports for the month stood at 25,000 mt, surging by 26.9% MoM and soaring by 60.98% YoY, propelling Thailand to the second-largest supplier. The synergy within the Asian regional supply chain has become increasingly prominent.

》View SMM copper quotes, data, and market analysis 》Click to view the historical price trend of SMM spot copper The latest data from the General Administration of Customs (GAC) shows that in April 2025, China's imports of copper scrap and shredded copper scrap exhibited a trend of "MoM recovery but YoY contraction," with monthly imports reaching 204,700 mt, up 7.92% MoM but down 9.46% YoY. From January to April, cumulative imports totaled 777,000 mt, a slight decrease of 0.81% YoY (HS code 74040000). I. Drastic Changes in Regional Patterns: A "Three-Kingdom" Drama of the US, Japan, and Thailand Looking at the breakdown of import sources, there has been a significant shift in the current structure of import sources, with traditional dominant player, the US, continuing to cede market share. Data from March-April shows that US copper scrap exports to China exhibited characteristics of "double declines": in March, exports were 22,500 mt (down 28.41% MoM and 51.51% YoY), with its market share in China dropping to 11.85% and its ranking falling to second place; in April, although exports increased slightly by 4.98% MoM to 23,600 mt, they still fell sharply by 43.98% YoY, with its market share further shrinking to 11.52% and its ranking being overtaken by Thailand, falling to third place. In stark contrast is the strong rise of the Asian supply chain. Japan's exports to China reached 32,700 mt in April, up 21.02% MoM and 13.78% YoY against the trend, securing the top spot with a 15.96% share. Additionally, the Thai market saw exports of 25,000 mt that month, surging 26.9% MoM and 60.98% YoY, becoming the second-largest supplier. The synergy of the Asian regional supply chain is becoming increasingly prominent. II. Aggravation of Structural Shortages, Dual Pressures from Policy and Market Looking ahead, according to SMM, the current supply of secondary copper raw materials in the market remains extremely tight, with both domestic and imported sources in short supply. Despite the continued market demand, many traders are actively seeking ways to import secondary copper raw materials, but overseas offers are scarce, making it difficult to achieve large-scale purchases. Furthermore, affected by Trump's tariff policies, traders generally reject US sources, which are more likely to be absorbed in local markets such as Japan and Thailand. In the coming months, imports are expected to maintain a trend of "declining volumes but rising prices," with the market shares of Japan and Thailand expected to exceed 18% and 14%, respectively, while the US share may fall below the psychological threshold of 10%. (The following presents import data by country for March-April 2025.)