Will China's Imports of US Secondary Copper Raw Material Decline in 2025? [SMM Analysis]

Published: Jan 2, 2025 17:45

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[Stalemate in Secondary Copper Raw Material Spot Price Changes Due to Multiple Intertwined Factors] Since the conclusion of China's economic meeting last week, the market has been closely monitoring the US Fed's actions. With the US Fed's December rate-setting meeting approaching, the market widely expects the Fed to cut interest rates by 25 basis points. However, despite the expectation of an interest rate cut, its impact on copper prices has so far remained within market expectations. Recently, copper prices have fluctuated rangebound, while secondary copper raw material spot prices have also been caught in a stalemate of indecision.

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According to customs data, from January-November 2024, China imported a total of 2.03 million mt of copper scrap and shredded copper scrap. The US remained the primary source of China's copper scrap imports, with a cumulative import volume of 395,000 mt, followed by Japan and Malaysia, with import volumes of 243,000 mt and 178,000 mt, respectively (HS code: 74040000).

Data Source: General Administration of Customs Platform, Compiled by SMM

China's Imports of Secondary Copper Raw Material from the US Expected to Decline

Although the cumulative import volume of secondary copper raw material increased 13.76% YoY from January-November 2024, SMM expects the import volume of secondary copper raw material to decline in 2025.

Since late November 2024, import traders in Ningbo have suspended accepting shipments from the US due to concerns over potential counter-tariffs on US copper scrap imposed by China if Trump returns to office. Based on shipping schedules, China's imports of secondary copper raw material from the US are expected to show a significant decline in January 2025. Over the longer term, SMM anticipates a continued downward trend in China's imports of secondary copper raw material from the US. On one hand, potential fluctuations in China-US trade relations will continue to influence the procurement decisions of import traders, making them more cautious in selecting import sources. On the other hand, with the continuous improvement of China's domestic copper scrap recycling system and the deepening development of the circular economy, the supply capability of domestic copper scrap will further increase, providing more options for the market.

China's Discount on US Scrap Copper Expands

Meanwhile, the discount on China's imports of US scrap copper has shown an expanding trend. As of December 27, 2024, the discount for No. 1 bright copper was 26.5¢/lb, and for No. 2 copper was 32.5¢/lb. This was mainly due to the suspension of purchases of US secondary copper raw material by import traders, further exacerbating market supply uncertainties.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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