[SMM Tungsten Flash] This week, APT CIF Rotterdam offers remained stable at $3,000-3,200/mtu, with European raw material prices generally steady. In the scrap market, Indian tungsten scrap drill bits FOB were quoted at $130-140/kg, up 17.39% from last week. Driven by higher Chinese tungsten prices, Indian scrap traders have collectively raised their offers. Coupled with low inventory levels, overseas scrap transactions have been active recently, with market sentiment turning optimistic.

[SMM Analysis：Rare Earth Scrap Recycling Slows as Tax Compliance Tightens, Impacting Production Rates]Recently, multiple rare earth scrap recycling enterprises reported that operating rates may decline in June-July. Large enterprises, with a higher proportion of self-procurement, are seeing more significant production reductions; small and medium-sized enterprises, relying less on self-procurement and more on processing orders, are relatively less affected.

As resource security and decarbonization become increasingly important, major economies are strengthening efforts to retain aluminum scrap. From the EU's review of export controls and the U.S. strategic asset proposal to Japan's circular economy initiatives and policies in the UAE and South Africa, these developments could reshape global scrap flows and affect secondary aluminum markets.

SMM Morning Meeting Summary: Overnight, LME copper opened at $13,576.5/mt, dipping to $13,554.5/mt early in the session. The price center then fluctuated upward throughout the session, reaching a high of $13,747/mt near the close, and ultimately settled at $13,746.5/mt, up 1.71%. Trading volume reached 21,000 lots, and open interest reached 276,000 lots, an increase of 5,289 lots from the previous trading day, indicating bulls adding positions. Overnight, the most-traded SHFE copper 2607 contract opened at 104,450 yuan/mt, fluctuating downward early in the session to a low of 104,100 yuan/mt. The price center then surged upward, reaching 105,290 yuan/mt near the close, and ultimately settled at 105,270 yuan/mt, up 1.17%. Trading volume reached 41,000 lots, and open interest reached 177,000 lots, a decrease of 310 lots from the previous trading day, indicating bears reducing positions.

SMM Morning Meeting Minutes: Overnight, LME copper opened at $13,625/mt, fluctuated downward in early trading to touch a low of $13,601/mt, then the price center moved sharply upward to probe $13,671/mt, before fluctuating downward again to finally close at $13,610.5/mt, down 0.18%, with trading volume at 17,000 lots and open interest at 268,000 lots, a decrease of 1,387 lots from the previous trading day, indicating bulls reducing positions. Overnight, the most-traded SHFE copper 2607 contract opened at 104,690 yuan/mt, dipped to 104,560 yuan/mt in early trading, then the price center fluctuated upward to touch a high of 105,050 yuan/mt, before experiencing wild swings to finally close at 104,760 yuan/mt, down 0.39%, with trading volume at 24,000 lots and open interest at 182,000 lots, a decrease of 17 lots from the previous trading day, indicating bulls reducing positions.

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 Morning Meeting Minutes: Last Friday evening, LME copper opened at $13,624.5/mt. In the early session, it experienced wild swings and dipped to $13,575.5/mt. Subsequently, the center of copper prices shifted upward, reaching a high of $13,678/mt, before fluctuating downward to finally close at $13,635/mt, up 0.18%. Trading volume reached 16,200 lots, and open interest stood at 269,000 lots, a decrease of 3,435 lots from the previous trading day, indicating bears reducing positions. Last Friday evening, the most-traded SHFE copper 2607 contract opened at 104,870 yuan/mt. In the early session, the center of copper prices fluctuated downward, touching a low of 104,420 yuan/mt. Subsequently, it fluctuated upward, reaching 105,280 yuan/mt, before moving sideways to finally close at 105,090 yuan/mt, up 0.58%. Trading volume reached 33,600 lots, and open interest stood at 172,000 lots, an increase of 627 lots from the previous trading day, indicating bulls adding positions.

Copper prices experienced wild swings this week, with a cumulative decline of over 400 yuan/mt. During the period, news of delayed production resumptions at an Indonesian copper mine triggered a single-day surge of 1,630 yuan/mt, which quickly pulled back. The wild swings dominated overall sentiment across the secondary copper industry chain

SMM Morning Meeting Summary: Overnight, LME copper opened at $13,508/mt, dipped to $13,454.5/mt early in the session, then the price center gradually shifted upward, reaching $13,620/mt near the end of the session, and finally closed at $13,610/mt, down 0.33%, with trading volume at 17,000 lots and open interest at 273,000 lots, an increase of 143 lots from the previous trading day, indicating bears adding positions. Overnight, the most-traded SHFE copper 2607 contract opened at 104,000 yuan/mt, touched a low of 103,620 yuan/mt right after the opening, then the price center edged up with small fluctuations and reached a high of 104,250 yuan/mt, finally moving sideways to close at 104,100 yuan/mt, up 0.06%, with trading volume at 34,000 lots and open interest at 162,000 lots, an increase of 1,224 lots from the previous trading day, indicating bulls adding positions.

SMM Morning Meeting Summary: Overnight, LME copper opened at $13,489/mt, initially rising to $13,533.5/mt before the price center gradually shifted lower to $13,386/mt, ultimately closing at $13,427/mt, down 1.2%. Trading volume reached 20,000 lots, and open interest stood at 277,000 lots, a decrease of 6,463 lots from the previous trading day, indicating bulls reducing positions. Overnight, the most-traded SHFE copper 2606 contract opened at 104,130 yuan/mt, initially touching a high of 104,170 yuan/mt before the price center shifted lower to a low of 103,390 yuan/mt, ultimately moving sideways to close at 103,670 yuan/mt, down 0.82%. Trading volume reached 31,000 lots, and open interest stood at 143,000 lots, a decrease of 4,124 lots from the previous trading day, indicating bulls reducing positions.