[SMM Analysis:The Paradox Behind the Stagnation of EU Internal Copper Scrap Trade and the Surge in Outflows]Market behavior is being further distorted by the anticipation of looming regulations. Starting in July 2025, the EU launched systematic customs monitoring of cross-border metal scrap movements. Stricter regulatory frameworks will take effect in May 2026, culminating in a total export ban to non-OECD countries by May 2027. This clear regulatory roadmap has triggered a "front-running" effect. To bypass future compliance costs, complex auditing processes, and the eventual ban, traders are accelerating liquidations during the current window of opportunity.

This week, the copper scrap market retreated after a rapid rise as copper prices hit a record high, with overall trading remaining sluggish. At the beginning of the week, copper prices climbed to 98,800 yuan/mt, an increase of 740 yuan/mt, while Guangdong bare bright copper prices followed the upward trend to 87,000 yuan/mt, marking a weekly gain of 1,400 yuan/mt. The price difference between primary metal and scrap once widened to 5,225 yuan/mt, theoretically giving secondary copper a significant economic advantage, but actual demand did not correspondingly release. Overseas markets came to a standstill due to the Christmas and New Year holidays, and trade in imported recycled copper raw materials was largely suspended.

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Against the backdrop of the US continuing to strengthen its “supply security” and “critical minerals” policy framework, base metals with high import dependency have increasingly come under market scrutiny. Historically, similar logic has already materialised under Section 232 in steel, aluminium and selected key metals. Within this context, zinc has been persistently viewed by the market as a potential candidate for closer policy attention.