Trade war frictions and attacks on free trade are reshaping the flows of copper scrap across borders. While copper scrap exports from the U.S., a leading supplier in earlier years are softening further, Japan and Thailand remain as strong players. This blog investigates the US copper scrap market as it stands, Japan and Thailand's continual lions-share holding of global copper scrap flows and drivers of where these flows will travel to in 2025.
Declining U.S. Copper Scrap Exports: Causes and Consequences:
The U.S. copper scrap industry has witnessed a sharp decline in exports over the past year, due to new national policies and evolving trade dynamics. Exports have become less competitive internationally, in part due to a U.S. government quota requiring that at least 25% of high-quality copper scrap be kept domestically to supply American manufacturers. Analysts note that while this policy is designed to boost domestic supply chains, it has created bottlenecks and limited scrap for overseas markets.
Trade tensions with China, the historic bearer of the U.S. copper scrap loads, are also a contributing factor to this reduction. As well, Chinese buyers dramatically reduced their purchases of American scrap as they responded to geopolitical uncertainties, and began divesting themselves of sole dependency on American territory by diversifying supply chains to Southeast Asia. Those shifts have forced the U.S. scrap processors to hunt for other markets and look closer to home, with the share of domestic internal consumption now at almost 40% of US scrap production.
Japan and Thailand’s Resilient Market Leadership:
Against this, the U.S. is set to cement its status as one of the world's leading copper scrap centres, alongside Japan and Thailand in 2025. The two countries are using sophisticated recycling infrastructure, strict quality controls and both sides' strategic positions in the region to draw scrap from a variety of suppliers throughout Asia and beyond. Their high content of copper has allowed it to be repeatedly recycled without any drop in quality, therefore driving downstream demand, especially from electronics and automotive manufacturers.
Its commitment to environmental controls and effective use of resources makes Japan’s scrap recycling industry quite strong in maintaining what is already a vibrant domestic circular economy. Neighbor Thailand, on the other hand, is one of the main doors for copper scrap entering ASEAN countries thanks to its strategic logistics system and government support in which they relax certain economic requirements on companies that invest in recyclers.
Market Dynamics and Regional Trade Flows:
A noticeable change in the global movements of copper scrap is revealed by trade data. While shipments to Japan, Thailand, and up-and-coming Southeast Asian processors have slightly increased, U.S. exports to China have drastically decreased, falling by more than 90% year over year. This continuous reorientation is in line with international initiatives to lessen reliance on a single market and diversify supply sources.
Price dynamics are also very important. As a result of supply constraints in Asian markets brought on by the decline in the U.S. exports, copper scrap prices have increased in Thailand and Japan. On the other hand, rising local consumption, supported by infrastructure spending and environmental incentives, has kept domestic U.S. prices comparatively steady.
Sustainability and Technological Advances Driving the Scrap Market:
Environmental concerns and regulatory pressures worldwide incentivize greater recycling of copper scrap due to copper’s recyclability without degradation of quality. Innovations in recycling technologies, such as advanced sorting, smelting, and refining processes, improve efficiency and reduce costs, enabling high-purity copper scrap production. Japan and Thailand have widely adopted these technologies, reinforcing their market advantages.
The circular economy model gaining momentum globally encourages industries to prioritize using recycled copper over mined resources to reduce carbon footprints. This trend supports sustained demand for high-quality copper scrap in export-focused economies like Japan and Thailand, while also encouraging the U.S.to optimize domestic recovery and reuse methods.
Outlook for the U.S. and Global Copper Scrap Markets:
In the foreseeable future, the domestic focus of the U.S. copper scrap market is anticipated to be sustained due to industry demands and regulatory incentives. However, if commercial and diplomatic situations improve, there is a chance for a gradual re-entry into Asian export markets. The competitiveness of the U.S. might be further increased by investments in green recycling technologies and scrap processing capacity.
The copper scrap industry is expected to increase steadily on a global scale, with Asia Pacific remaining the region's top consumer and processor. It is anticipated that Thailand and Japan would continue to lead due to their strategic trade networks and technological superiority. Initiatives for the circular economy and sustainable practices will continue to play a key role in determining supply and demand dynamics.
Source: Shanghai Metals Market
