Copper Concentrate Tightness Fuels Rise in Recycled Copper Demand

Tight copper concentrate supply has led to a surge in demand for recycled copper, making it an essential feedstock for smelters and fabricators. As of August 21, the SMM Imported Copper Concentrate Index had fallen to -$182.14/dmt, down $6.77/dmt from the previous week. This drop in concentrate prices has squeezed smelting margins, forcing companies to rely more heavily on recycled materials.

The shortage of copper scrap inventories in China is particularly concerning, with low levels of No. 1 and No. 2 copper scrap available for purchase. To make up for this shortfall, Chinese buyers are increasingly turning to imported scrap, which typically comes with complete customs, tax, and invoice documentation.

The combination of concentrate tightness, low global inventories, and slow scrap generation is expected to keep global inventories low and payabilities elevated in the near future. However, if clearer tax policies allow tax-excluded scrap to re-enter compliant circulation, domestic supply could increase, putting pressure on both Chinese and global scrap prices.