In recent years, copper scrap imports have been continuously increasing. Entering 2024, the copper scrap import market has continued to grow. According to data from the General Administration of Customs, as of July 2024, the cumulative import volume of copper scrap and shredded copper scrap reached 1.34 million mt, up 16% MoM. Notably, in April, copper scrap imports reached 230,000 mt, up 4% MoM and a significant 56% YoY, far exceeding market expectations (HS code 74040000).
In H1, international copper prices showed a significant upward trend, especially on May 20, when copper prices reached a historical high, with the highest price of #1 copper cathode on that day being 87,490 yuan/mt. However, the copper scrap import trade did not fully prosper as a result. Due to copper scrap import losses exceeding 6,000 yuan/mt in some months, trade activities cooled down. Nevertheless, copper scrap imports still achieved YoY growth, reflecting the market's continued demand for copper scrap resources. Additionally, copper concentrate TCs fell throughout H1, and tight supply on the mining side forced smelters to opt for copper anode as a supplementary production raw material, which undoubtedly increased the demand for copper scrap. The proportion of copper scrap flowing to smelters increased in H1 2024. According to SMM statistics, in 2023, the volume of copper scrap flowing to the processing side was 1.203 million mt, while the volume flowing to the smelting side was 1.515 million mt, accounting for 55.7%. In H1 2024, the volume of copper scrap flowing to the smelting side reached 884,000 mt, accounting for 62.6%, indicating a significant increase in smelters' demand for copper scrap.
Meanwhile, in H1 2024, the price difference between primary metal and scrap first widened and then narrowed, making copper scrap a strong substitute for copper cathode for most of the time, and import traders were more inclined to increase their procurement of copper scrap.
In the field of copper scrap exports, the United States, Japan, and Malaysia continued to maintain leading positions. These countries, with their well-established recycling systems and stable market demand, remained the top three suppliers of copper scrap to China. Particularly, Southeast Asian countries like Malaysia and Thailand, with their geographical location and cost advantages, have attracted significant attention and investment from Chinese secondary copper enterprises.
In summary, driven by the significant rise in copper prices in H1 and the continuous decline in copper concentrate TCs, coupled with the price difference between primary metal and scrap first widening and then narrowing, copper scrap served as a strong substitute for copper cathode for most of the time, leading to increased utilization of copper scrap by smelters and downstream recycling enterprises. Looking ahead to September, current market conditions suggest that factors such as the shutdown of secondary copper rod plants, reduced production of copper anode, and uncertainties in tax refund policies may negatively impact copper scrap import volumes. However, if the global economy continues to recover and the domestic economy maintains stable growth, copper scrap import volumes may remain relatively stable or slightly increase.
