China’s copper smelters rue Beijing’s curbs on US raw materials

Beijing’s response to punitive US tariffs could create yet another headache for Chinese copper smelters, already grappling with a shortage of raw materials and plummeting profits.

China’s swift retaliation in matching Washington’s blanket 34% levies is likely to bring US shipments of copper scrap to a halt from next month. The country last year accounted for about one-fifth of China’s overseas purchases, which have been used as a replacement feedstock for the copper ore that’s in short supply.

Imports of American scrap could top out at 100,000 tons or less in the first four months of the year, before China’s tariffs make the trade uneconomical, according to a forecast from Shanghai Metals Market. Imports last year were nearly 440,000 tons.

China has kept adding copper processing capacity despite the scarcity of ore from mines around the world. That’s led to a collapse in fees to negative levels, which has left smelters needing to pay to process concentrate into refined metal.

Using scrap metal instead has been a handy workaround and accounted for about 30% of refined copper production in 2023, according to the latest figures from the China Nonferrous Metals Industry Association.

US shipments to China also crashed during the trade war with the first Trump administration, before a gradual recovery in volumes. The onus now on exporters will be to find alternative buyers for their piles of scrap. The global shortage of ore could make that relatively easy — unless duties are levied in other countries, too.

If Trump 2.0 is successful in rebuilding America’s manufacturing base, including metals processing, it’s likely that future supplies end up only for domestic use.

Exports of US copper concentrate to China are also expected to slump to between 50,000 and 70,000 tons this year, according to SMM, compared to 460,000 tons in 2024. But that won’t have nearly as much impact as American supplies accounted for less than 2% of China’s purchases last year.

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