Overseas Secondary Copper Raw Material Imports Decline, Where Do Import Traders Go? [SMM Analysis]

SMM March 30 News: According to customs data, China's secondary copper imports in January and February 2025 were 18.92 and 193,400 mt respectively, showing varying degrees of decline compared to December of previous years. There are two main reasons for this. First, after Trump took office, he continuously imposed additional tariffs on Chinese imports, and China also implemented countermeasures to varying degrees. However, based on the frequent trade wars between China and the US during Trump's previous term, some secondary copper raw material importers are concerned that if China's countermeasures against US imports include secondary copper raw materials, they will bear additional import tariffs. Currently, with overseas copper prices, whether LME copper or COMEX copper, being inverted compared to the domestic SHFE copper market, importing secondary copper raw materials is inevitably a loss. If additional import tariffs are imposed in the future, the significantly increased costs will only expand the import losses. Second, as Trump's copper import tariffs have not yet been implemented, COMEX copper prices have been rising, leading to an increasing spread between COMEX and LME copper futures. Similarly, the spread between SHFE and LME copper is also widening. China's secondary copper raw material importers usually hedge mainly with SHFE copper, so when considering SHFE copper prices, their offers to overseas secondary copper raw material suppliers are often lower than those of other countries. Since January this year, China's secondary copper raw material offers have been lower than those of other countries. The above factors have led to varying degrees of decline in secondary copper raw material imports in January and February. By analyzing the data on the source countries of secondary copper raw material imports, the top four remain the US, Japan, Thailand, and Malaysia. However, the data shows a monthly decline in secondary copper raw material imports from the US. According to Ningbo importers, since January 2025, due to losses from the SHFE/LME price ratio and concerns about changes in domestic import tariff policies, they have suspended imports of secondary copper raw materials from the US. The decline in imports from Malaysia is mainly due to the local government preparing to revise the import standards for scrap metal. Currently, Malaysia's copper scrap import standards require a copper content of no less than 94%, but some still illegally import copper scrap that does not meet the standards through smuggling. The processing of such scrap metal has severely affected the environment in Malaysia, prompting the government and customs to raise import standards and increase inspection efforts to prevent non-compliant copper scrap from entering Malaysia. As a result, some traders have transferred such scrap metal to Thailand for customs clearance and local processing, leading to a significant increase in imports from Thailand in February. However, according to the heads of local scrap metal processing companies in Thailand, the Ministry of Industry is investigating the environmental issues caused by scrap metal processing and will draft relevant policies on import standards for scrap metal. Therefore, in the future, as Thailand and Malaysia serve as transit countries for China's secondary copper raw material processing, their import volumes may decline due to local policy adjustments. In summary, the current domestic import volume of secondary copper raw materials is affected by China-US trade relations, with the import window remaining closed for a long time. As Southeast Asian countries continue to raise their import standards for scrap metal, China's imports of secondary copper raw materials from the US and Southeast Asia are expected to decline to varying degrees within the year. Therefore, many domestic traders have started to gradually develop secondary copper raw material markets in Africa, the Middle East, and Central Asia. However, these regions are not major copper consumers. In the short term, the social inventory of secondary copper raw materials may alleviate China's urgent needs, but in the long run, these regions cannot provide China with a stable supply of secondary copper raw materials. 》Order to view SMM metal spot historical prices 》Click to view SMM copper industry chain database