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Gold, silver, and platinum are the first precious metals that come to mind. But, in this category, Copper Base Metal is also listed as the next big metal - why?
Because of its widespread use in all economic activities, "Copper Base Metal" is regarded as the New Gold of the Twenty-First Century. Meanwhile, according to Goldman Sachs' "Copper is the New Oil" report, Copper will approach $51,000 per metric tonne by 2025.
Is it true that Copper Scrap prices have reached an all-time high? Yes, Copper Scrap reached record highs in 2022, approaching $4.30/lbs in the US market and Rs.796/kg in the Indian market.
So, why are Copper Scrap prices expected to skyrocket so quickly? In this article, let's look at why there is an increase in Copper Scrap demand and how to profit from higher Copper Scrap prices.
At the time of writing, Copper Scrap prices are trading at,
Copper No.1 Scrap Prices (US): 3.08 USD/Lbs
Copper No.1 Scrap Prices (Canada): 4.62 CAD/Lbs
Copper Cable Scrap Prices (Mumbai): Rs.673/KG
Copper Wire Scrap Prices (Delhi): Rs.626/KG
Also, Copper prices are now trading at,
MCX Copper Prices (INDIA): Rs.684.60/KG
COMEX Copper Prices (US): 3.72 USD/Lbs
SHME Copper Prices (China): 67250 Yuan/Ton
Yard Copper Prices (Australia): 9.93 AUD/KG
JPX Copper Prices (Japan): 1083 Yen/KG
Frankfurt Copper Prices (Germany): 8256.84 EURO/KG
Why Are Copper Scrap Prices Rising?
Copper is a precious metal that always stays in high demand due to its widespread use in construction, energy transition, electric vehicles, etc., as it is an excellent conductor of heat and electricity and is more flexible than other metals.
Meanwhile, compared to other recyclable metals, Copper Scrap is highly valued because it can be recycled repeatedly without losing quality. Copper Scrap recycling is also less expensive and more environmentally friendly, and using recycled Copper is preferable to mining for virgin Copper.
So, if Copper has always been important and valuable, why have Copper Scrap prices skyrocketed recently? It's a tough global market, but there are a few key reasons for the surge.
Increased Demand for Copper Scrap Due to Base Metal Price Difference
Higher Copper Base Metal pricing encouraged investors to purchase Copper Scrap, resulting in a higher demand forecast. Why is buying new Copper becoming more expensive recently?
Because of geopolitical crises such as China's Covid curbs, the ongoing war in Russia-Ukraine, interest rate hikes, recession fears and slower economic activity, low investors in warehouses, and supply disruptions in copper mines, made Copper Base Metal prices stay elevated.
Copper base metal prices have remained at all-time highs since reaching a record high of Rs.871/Kg in March (MCX futures) and $4.95 in CME futures.
Meanwhile, the price difference between Copper Base Metal and Copper Scrap has shrunk, and investors now have a choice in recycled Copper Scrap metal. As a result, the demand for copper scrap has recently increased.
i. Higher Copper Scrap Recycling Rate
When resources are scarce, recycling Copper Scrap becomes more important than ever. Recognizing the value of recycling copper scrap, many manufacturing companies value purchasing copper scrap to create new copper products.
According to a research report, recycling "old" scrap produces approximately 8.7 million tonnes of Copper per year.
According to a Copper Development Association report, "Copper's recycling value is so high that premium-grade scrap typically has at least 95 (per cent) of the value of the primary metal from newly mined ore."
Furthermore, scrap has been designated "the world's largest copper mine" and "the world's most responsive," given producers' ability to source more or less depending on prices.
Who Are The Copper Scrap Market Key Players?
According to the International Copper Association, copper scrap accounts for approximately 30% of global copper demand. According to ICA, copper scrap accounts for approximately 32% of the nation's copper supply in the United States, while recycled Copper accounts for approximately 50% of all copper use in Europe.
In terms of other countries, China, which accounts for roughly half of global copper demand, is also the world's largest refiner of Copper from scrap material. Imported copper scrap is in high demand in China.
According to the International Copper Association, the country imported a record-high 6.68 million tonnes of Copper Scrap in 2020. This demand has helped drive Copper Scrap prices significantly higher to the present.
In September 2022, China's Scrap Copper exports accounted for up to $113k, and imports accounted for up to $1.17B, resulting in a negative trade balance of $1.17B. Between June 2021 and September 2022, the exports of China's Scrap Copper have increased by $62.2k (123%) from $50.6k to $113k, while imports increased by $121M (11.6%) from $1.05B to $1.17B. (Source - oec.world)
Did you know that recycling scrap metal, such as copper scrap, can save your company money and reduce disposal costs? Not only that, but it can benefit both the global and national economies! – how?
According to a study, Recycling Copper uses 85 per cent less energy than primary copper production at the mine level. Copper recycling reduces electrical energy use by 100 million megawatt hours per year and keeps 40 million tonnes of carbon dioxide out of the atmosphere.
It is clear that the effort required to recycle Copper Scrap is minimal and environmentally friendly, so recycling Copper Scrap is a better option than using virgin Copper.
ii. Low Copper Stockpiles in Warehouses Globally
Copper stockpiles have been critically low, owing largely to a slowdown in the world's largest Copper mining due to a continuous blockage and protest at the mine, an issue that has been ongoing for more than a year.
As a result, Copper inventory held in London Metal Exchange warehouses worldwide reached a 16-year low in 2021. Stockpiles in registered warehouses are still lower than they have ever been. Copper prices/Copper Scrap prices rose automatically as supply dried up and demand remained high.
However, this trend will likely continue because increased mine production should produce more copper supply to meet demand. However, due to supply disruptions, copper supply from mines is also limited.
"Except for a few major mines coming through in Chile and Peru, market growth is relatively limited," says David Kurtz, GlobalData's director of mining and construction. He adds that production in Chile has decreased this year due to lower ore grades and labour issues. Chile remains the world's largest copper producer, but production is expected to fall by 4.3% in 2022.
So, Copper Scrap is required wherever there is a demand and a lack of supply. Copper Scrap will continue to play an important role in the overall copper market, particularly when primary Copper mines are disrupted or are simply not producing enough metal to meet demand.
iii. Copper Discoveries are Down
According to S&P Global, new copper discoveries have been declining over the last decade. In other words, miners aren't discovering as much copper ore as they used to. Reducing the supply of new materials makes existing Copper even more valuable.
While a slowdown in copper discoveries could be a long-term issue, experts are optimistic about a recovery. The International Copper Study Group (ICSG) predicted in mid-2021 that global copper mine production would rise by 3.5 per cent in 2021 and 3.7 per cent in 2022.
There is a slight increase in Copper production compared to the previous year, indicating that the Copper Scrap we handle now is extremely valuable, as mine supply may cease at any time, unable to meet the demand for Copper supply.
You don't want to be waiting on your Copper Scrap right now. Profit from a booming market for Copper Scrap and turn that valuable metal into cash while prices are high.
So, how can you take advantage of and disadvantages of Copper Scrap metal?
If you want to save money, recycle your Copper Scrap by selling at competitive costs in a reputable scrap mart like RecycleInMe.com.
At RecycleInMe, you can find Copper Scrap, Copper Scrap prices, Copper Scrap suppliers, Copper Scrap buyers, Copper Scrap to buy and sell, and other categories of scrap. We have genuine Copper Scrap buyers and suppliers who pay competitive pricing for all grades of Copper Scrap and other scrap metals. Register now and start receiving business leads.
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