According to media reports, copper scrap that had been piling up for weeks in Salt Lake City, US, has finally started to clear, largely due to progress in the China-US trade negotiations.
Affected by the previous trade disputes, copper scrap exports from the US had almost ground to a halt, resulting in up to 300,000 pounds of copper scrap being forced to accumulate in the yard of Utah Metal Works Inc. This copper scrap came from old air conditioners, demolished buildings, and rusty cars.
Now, with the US and China temporarily reducing each other's tariffs, US scrap metal merchants are striving to resume copper scrap exports to China.
Due to its durability, malleability, and electrical conductivity, copper has long been widely used in the construction, transportation, and power industries. In recent years, it has also been used in the manufacturing of EVs, green energy plants, and data centers.
In recent years, as copper demand continues to rise while copper mine production becomes increasingly tight, copper scrap has played a crucial role in the global supply, accounting for about one-third of the total.
For a long time, US copper scrap exports to China have been a vital part of the global copper supply chain. Last year, one-fifth of the copper scrap imports by Asian smelters came from the US. China is the world's largest producer of copper cathode, accounting for more than half of global production.
As a major exporter of copper scrap, the US exported 600,000 mt of copper scrap last year, a scale comparable to some of the world's largest copper mines, with more than half of it sold to China.
Although tariffs have temporarily decreased, it is still unclear whether this will be enough to prompt US merchants to re-export the accumulated copper scrap.
Analysts point out that the profit margins for copper scrap import businesses are very thin, making it difficult to import copper at any tariff level.
The trade disputes have disrupted the entire copper scrap market. Data shows that the price of No. 2 copper scrap supplied by the US has seen a discount of 92.5¢ per pound compared to futures prices, the largest price spread ever recorded.
In addition to trade restrictions, the price structure of US copper scrap has also dampened the purchase willingness of international buyers.
Due to previous threats by US President Trump to impose import tariffs on copper, US copper prices have been significantly higher than those in other parts of the world this year. Some commodity giants have taken advantage of this to export copper to the US from around the world, profiting from the price difference.
The pricing of US copper scrap relies on the futures prices of the New York Mercantile Exchange (Comex). Faced with the relatively high prices, overseas buyers are generally deterred.
Some traders have tried to shift their focus to other regions, such as Japan, but these markets are not enough to fill the gap left by China.
