Scrap copper exports effectively came to a sudden halt after Trump started a trade war with China and other trading partners around the world. China imports more than 50% of the scrap copper collected in the U.S., and the prohibitive tariffs between these major trading partners made it nearly impossible for this metal to change hands.
US dealers and their Chinese counterparts are frantically working the phones in order to complete deals and get scrap copper moving during the temporary truce that Trump says could end with high tariffs in case an appropriate deal isn’t agreed upon during the expected talks with China.
The disruptions seen in the market for scrap copper are a reflection of the chaos unleashed in various industries after the latest spate of the trade war was declared. The scramble within the market for scrap copper shows just how difficult it can be to remedy supply chain issues after the fact, and it isn’t a sure deal that relationships that existed before the turmoil will be rebuilt to the same degree during this truce or even after a permanent deal is struck.
Scrap yards in the U.S. were forced to sell the metal at steep discounts while processors in China scrambled to look for alternative suppliers of the scrap they badly needed for their operations. Given that China buys the bulk of the scrap copper originating in America, both sides suffered a great deal from the time “Liberation Day” tariffs were announced.
The copper market is widely viewed as the pulse of the global economy since it’s heavily used as an industrial metal. Given that newly mined copper has been declining in volume, scrap has been meeting approximately 33% of the annual demand for copper around the world. Copper is needed in the EV industry in addition to other electrical equipment and installations.
In 2024 America sold 600,000 tons of scrap copper to address the huge global demand. This quantity made the scrap metal from the U.S. to exceed the annual production capacity of several major mining operations around the world.
As a result of the tariffs, American scrap copper yards have failed to get sufficient alternative buyers of the metal, and this caused scrap metal prices to tumble immensely. Fastmarkets data shows dealers were compelled to offer 95 cents discounts on each pound of copper in comparison to the price at which copper futures are traded. This is the widest-ever difference in price.
What is happening in the market for scrap copper affects the trading of freshly mined copper, and enterprises like Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) are likely to keep a close eye on the evolving situation in order to adjust their projections and strategies accordingly.
NOTE TO INVESTORS: The latest news and updates relating to Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) are available in the company’s newsroom at https://ibn.fm/ATBHF
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