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  • BIR Copenhagen 2024 - Non-Ferrous Metals Division: Copper scrap availability continues to be tight despite LME surge

BIR Copenhagen 2024 - Non-Ferrous Metals Division: Copper scrap availability continues to be tight despite LME surge

  • 29 May 2024

“Copper scrap is not flowing as freely as it was” because “governments all around the world are becoming more protectionist”, resulting in “more and more barriers to keep it ring-fenced in every geography”. So said Edward Meir, independent consultant to Marex, in his contribution to the latest meeting of the BIR Non-Ferrous Metals Division staged at the Bella Sky Hotel in Copenhagen on May 27.

Focusing mainly on copper, the guest speaker attributed the metal’s recent price “explosion” to a confluence of factors, including mining issues, aggressive fund buying and strengthening demand for applications relating to electric vehicles and artificial intelligence. Having acknowledged forecasts that copper prices could yet head significantly higher, he pointed out that “we are not seeing scrap coming out” despite the surge on the LME. “This shows how tight the market is,” he said.

Despite hitting a two-year high in May, aluminium has not seen the same strong buying as copper, partly because it is less impacted by developments in electric vehicles and artificial intelligence, and also because the far greater number of aluminium producers around the world serves to alleviate concerns of a squeeze, according to Mr Meir.

“We see sustainability as a huge challenge and something our customers come to us to demand,” explained fellow guest speaker Andreas Fenster, Vice President Metals Management Europe at Wieland-Werke AG in Germany. Customer inquiries regarding carbon footprint and recycled content were increasing significantly in number and complexity, he told delegates in Copenhagen.

Mr Fenster’s company is among the world’s leading suppliers of semi-finished copper and copper alloy products, with a manufacturing and service network spanning North America, Europe and Asia. It has set a goal of increasing recycled content in its products to more than 90%, entailing consumption of some lower grades of scrap that the business has not used in the past such as No.2 copper/Birch Cliff.

Even higher copper prices would hurt struggling companies - not least because of the elevated financing costs, stated Mr Fenster during a panel discussion involving the guest speakers, divisional President Paul Coyte of Hayes Metals in New Zealand, Elinor Feuer of Sweden’s Chilanga AB, Murat Bayram of European Metal Recycling in the UK and Christian Bonnicksen of HJ Hansen Recycling Group A/S in Denmark.

On the issue of regulations, Mr Fenster described compliance pressures as “challenging”, highlighting in particular the large amount of work created by the EU’s Carbon Border Adjustment Mechanism for imports of carbon-intensive goods.

Mr Bayram and Mr Bonnicksen agreed that regulations were often unclear and subject to differing interpretations from country to country. Mr Bayram urged interested parties to harmonize their advocacy efforts and to become “louder and more visible” before legislators “create the next monster for our industry”.

BIR is now commissioning a major study on the environmental benefits of recycling which would help in discussions with legislators and policy-makers as this would call for a greater conversation based on facts, according to Mr Coyte.