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

In April 2026, China imported 211,700 mt in physical content of copper scrap and shredded copper scrap, down 6.96% MoM and up 3.41% YoY. Cumulative imports from January to April 2026 reached 839,600 mt in physical content, up 8.05% YoY on a cumulative basis. (HS code: 74040000)

[Imports of Copper Scrap Remained Strong YoY] In April, the structural supply gap of copper scrap in China remained prominent. The tight invoice situation showed no significant improvement, with invoiced supplies remaining scarce in circulation, driving domestic trade prices persistently higher. From March to April, spot bare bright copper prices for imports in Zhejiang stayed at elevated levels, with discounts against futures contract maintained at 300-800 yuan/mt. Downstream compliant copper enterprises, constrained by production, operation, and tax requirements, maintained stable just-in-time procurement. Imported sources became an important channel to fill the domestic raw material gap, supporting copper scrap imports to maintain YoY growth.

[SMM News Flash] Japan exported 34,200 mt of copper scrap to China in April, accounting for 16.15%, up 4.65% YoY but down 17.60% MoM. As the second largest supplier, it still maintained positive YoY growth and remained an important supplementary source of copper scrap for China.

[SMM Update] Thailand exported 35,000 mt of copper scrap to China in April, accounting for 16.55%, up 39.86% YoY but down 14.22% MoM. Thailand remained China's largest source of copper scrap imports. Despite the MoM pullback, it still maintained a nearly 40% high growth rate YoY, reflecting its stable supply capability.

SMM Morning Meeting Summary: Overnight, LME copper opened at $13,317/mt, moved sideways after the opening before dipping to a low of $13,168/mt, then the center rose to a high of $13,348/mt, and finally closed at $13,259/mt, down 0.68%, with trading volume at 18,000 lots, a decrease of 809 lots from the previous trading day; open interest stood at 316,000 lots, a decrease of 4,795 lots from the previous trading day, with the overall movement mainly characterized by bulls reducing positions. Overnight, the most-traded SHFE copper 2604 contract opened at 102,670 yuan/mt, fluctuated downward after the opening to a low of 101,780 yuan/mt, then the center rose to a high of 102,880 yuan/mt, and finally closed at 102,550 yuan/mt, down 0.15%, with trading volume at 55,000 lots, a decrease of 51,000 lots from the previous trading day; open interest stood at 186,000 lots, an increase of 1,437 lots from the previous trading day, with the overall movement mainly characterized by bears adding positions.

[SMM Flash News] China’s copper scrap import sources showed clear characteristics of “one dominant player with many strong suppliers, and diversified sources.” Japan, Thailand, and Spain have long ranked among the top three, with their core supplier positions remaining solid. Japan: exports to China were 31,200 mt in January, accounting for 13.43%, up 104.94% YoY; exports were 26,600 mt in February, with the share rising to 15.81%, still up 13.93% YoY. Although both months declined MoM, its core supplier position remained unshaken.

According to the latest data from the General Administration of Customs, China imported 232,300 mt in physical content of copper scrap and shredded copper scrap in January 2026, down 2.78% MoM and up 22.82% YoY. Imports were 167,900 mt in physical content in February, down 27.72% MoM and down 13.14% YoY. Cumulative imports in January-February 2026 reached 400,300 mt in physical content, up 4.64% YoY on a cumulative basis. (HS code: 74040000)

SMM Morning Meeting Minutes: On Friday night last week, LME copper opened at $12,871.5/mt. After fluctuating rangebound in early trading, it dipped to $12,805.5/mt, then the center rose to a high of $12,927.5/mt, and finally closed at $12,869/mt, up 0.08%. Trading volume fell by 3,517 lots from the previous trading day to 24,000 lots; open interest increased by 2,377 lots from the previous trading day to 308,000 lots, mainly reflecting bulls adding positions overall. On Friday night last week, the most-traded SHFE copper 2604 contract opened at 100,250 yuan/mt. It bottomed at 100,180 yuan/mt in early trading, then the center rose to a high of 100,820 yuan/mt, and finally closed at 100,250 yuan/mt while fluctuating rangebound, down 0.53%. Trading volume fell by 58,000 lots from the previous trading day to 69,000 lots; open interest increased by 1,229 lots from the previous trading day to 197,000 lots, mainly reflecting bears adding positions overall.

SMM Analysis: In 2025, China's smelting and refining capacity grew, while the TC for copper concentrates continued to deteriorate. Against this backdrop, smelters were compelled to adjust their raw material mix, with copper scrap, blister copper, and anode plates becoming key substitutes and supplements...