A study by Grand View Research indicated that the U.S. copper scrap market size was valued at $661.3 million in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 4.5 percent from 2023 to 2030.
According to the study, the rising focus on the electrification of vehicles amidst efforts to reduce greenhouse gas emissions is driving the growth of the copper scrap market. Electric vehicles (EVs) require nearly four times more copper compared to internal combustion engine (ICE) vehicles, increasing copper’s importance within the electric vehicle marketplace. In addition, copper is increasingly being used with the electrical components and systems for aircraft, trains and marine vessels, focusing further attention on the role recycled copper can play in the required supply within the transportation sector.
Eric Saderholm is the managing director of exploration, company co-founder, and director of American Pacific Mining Corp, a precious and base metals explorer and developer focused on opportunities in the Western U.S. with projects in Alaska, Montana and Nevada.
As Saderholm explained, the copper market is on a steady upward trajectory based on several factors. First and most important, there is an upturn in global copper demand coupled with growing concern for future production shortfalls and supply deficits. This recent uptick in demand for the red material shows no signs of slowing over the long term. While short-term dips in copper are expected, so are spikes, based on global economic factors.
“Conservatively, hard-rock copper mine production is forecast to drop by 15 percent in the next 20 years worldwide, while global demand is expected to double during this period,” Saderholm said. “This presents consequential fulfillment challenges as the electrification of the planet and green energy options become increasingly common and now, often mandated. Wind energy, solar power, and electric vehicles (EVs) require a tremendous amount of copper to manufacture and implement. The modernization of developing countries, which have historically needed minimal refined copper resources, is now adding to increased global copper demand and placing new pressure on supply chains.”
Meanwhile, as Saderholm pointed out, copper recycling is becoming increasingly important for sourcing supply. It is currently responsible for approximately 30 percent of refined copper on the market which is a substantial contribution and recycling of processed copper is forecast to rise steadily to help fill worldwide production deficits.
“However, the copper recycling process is not without challenges,” Saderholm said. “Most of the stockpiled copper scrap is in the form of alloys such as bronze and brass that contain potentially toxic elements such as lead and arsenic that are difficult to liberate from the alloy as a part of the recycling process. To address this, technological advances for the efficiency of economic metal segregation and processing are ongoing as copper recycling will need to fill some of the supply voids left by diminishing hard rock production.”
As Erin Smith, deputy director, EHS & Recycling at Copper Development Association explained, some market segments are experiencing a notable surge in copper demand, largely driven by the clean energy transition, electrification of transportation, data centers, and the integration of green and healthy building practices.
“Copper is crucial for the low-carbon economy, supporting sectors like wind power, electric vehicles, heat pumps and energy storage,” Smith said.
Additionally, a need for copper building materials plays a key role in growth, including the increased focus on zero emissions and resilient building designs, which address concerns about climate change and environmental sustainability.
As Smith explained, copper offers significant advantages, including energy, water and maintenance cost savings compared to traditional building materials, leading to increased asset valuation and risk mitigation for building owners and developers. Also, copper’s high residual value and infinite recyclability, with no loss in properties, make it the sustainable choice for many applications.
“One of the biggest issues facing the copper industry that metal recyclers need to be aware of, is the significant amount of high-grade copper scrap currently exported from the U.S., which could instead be recycled domestically,” Smith said. “Additionally, an even larger volume of complex alloy scrap is exported because the U.S. lacks the necessary processing capacity and capabilities to recycle it domestically.”
To address these issues, Smith said it is essential to develop strong partnerships and collaborate on devising solutions throughout the entire copper value chain, which includes scrap dealers and recyclers.
Smith suggested that by increasing the amount of recycled material processed domestically, the U.S. can strengthen its economy, shorten supply chains, and reduce emissions from transcontinental scrap shipments.
“Processing more scrap domestically promotes job creation and manufacturing growth, contributing to a stronger and more resilient U.S. economy and copper supply chain,” Smith said.
Saderholm added that copper theft is becoming a serious problem. Theft cases today are escalating at roughly the same rate as the rising price of copper. Obviously, copper being transported from mines to processing facilities and refined copper products are heavily protected by security measures.
“However, copper thieves have become increasingly organized from merely opportunistic individuals to highly strategic groups that evaluate their targets, execute the thefts with great precision, have sophisticated fencing operations for moving copper for market re-sale, and have more outlets to sell their stolen goods,” Saderholm said. “Aside from the losses for individual businesses, this issue has grown from a nuisance to a national security issue. Many times, copper thieves target vital infrastructure including telecommunication towers, electrical facilities, water supplies, and critical security systems. Abandoned or vacant structures are the most common targets of thieves since these sites are difficult to secure and patrol and security measures are almost nonexistent. With global demand for copper at all-time highs, copper theft is expected to continue on an upward trajectory.”
Upgrading site security, including armed guards, abandoned site patrols, and camera surveillance, is one way to curb global copper theft.
“Another important method to minimize theft is to identify and scrutinize the buyers of stolen copper products to help identify groups responsible for the thefts,” Saderholm said. “Copper theft usually carries very light fines and short prison sentences, and these punishments should be much harsher to hinder the upswing in thefts. As an outcome, these increased security measures and deterrents will be costly to implement and directly affect future copper prices.”
Other challenges for the copper industry include recycling process location and capacity, energy availability, adequate space for stockpiling, permitting concerns, environmental stewardship, social license and acceptance, further public education about the importance of recycling, ease of transport of scrap, and waste management and disposal.
“There is a long list of challenges and concerns, but none are insurmountable with government and public awareness and support,” Saderholm said.
Future Initiatives
Several new operations are coming online in the U.S. that will increase secondary smelting and refining capacity and open up new sources of recycled feedstock for copper and copper alloy semi-fabricators at a critical time.
According to Smith, copper plays a pivotal role in the U.S. economy, defense, and the decarbonization of other industries, including construction.
Because of its strength, corrosion resistance, and electrical conductivity, copper is highly used in the construction sector and is ideal for plumbing, roofing, electrical wiring and heating systems. And as the world continues to experience a construction “boom” especially in developing countries, a lot of copper is required. As such, attention is being paid to scrap copper garnered from obsolete buildings, construction debris, and other infrastructure.
Recycling copper is also economically beneficial as virgin copper must undergo lengthy mining, refining and shipping procedures. That’s why more and more manufacturers across a variety of industries are embracing copper scrap. And as copper recycling technology continues to be refined, the overall process has become more effective and efficient in the sorting, smelting, and refining of recovered copper– all of which results in high-quality recycled copper outputs.
“It is crucial to acknowledge that recycling alone will not suffice to meet future demand as many copper products have very long service lives and do not leave the urban mine for decades,” Smith said. “Meeting projected U.S. demand growth requires an ‘all-of-the-above’ approach to increasing supply. The U.S. will need to mine and refine more copper, recycle more, and maintain imports from reliable trade partners to ensure a robust and resilient supply chain.”
And Saderholm pointed out that with copper’s recent addition to America’s critical metals list, the industry is hopeful this status will bring greater awareness of the importance of the red metal to U.S. consumers. This can be leveraged to build a needed platform to educate the public, connecting the dots between copper’s role in the use of everyday products and its importance in the transformative changes now happening in technology, electrification, and energy.
“Copper’s critical metal designation can also help the U.S. industry’s case for America to become self-reliant in producing and recycling copper, and the role that government must play for this to happen,” Saderholm said. “Over the years, U.S. governments of all political stripes have been slow to react in addressing the nation’s copper shortage. In an attempt to play “catch up,” they offer subsidies and incentives to expedite copper mine permitting alongside approvals for expansive recycling facilities. In truth, the U.S. is far behind Europe in incentivizing and promoting copper recycling. Today, America is the second largest consumer of copper behind China, and our over-reliance on other countries to supply necessary metals and mineral needs is not a long-term strategy for creating a sustainable long-term supply.”
While copper’s critical metals status is a good step forward, Saderholm said the industry needs to be plain in delivering sober comments to the masses about why we are facing a supply shortfall, domestically and internationally.
“Existing mines can only produce so much copper for so long. Hard rock copper mines are now facing several upcoming challenges due to this increased worldwide copper demand. Many large mines have been in production for several decades or more,” Saderholm said. “These operations are now dealing with diminishing ore reserves, lower grade ore production, increased permitting and processing costs, as well as numerous geopolitical issues. ”
Bringing new copper mines online takes many years. Even when resource opportunities and political views align for developing a new copper mine, time is needed to address environmental, Indigenous, and community stakeholder considerations. These consultations, together with permitting, may require 15 or more years before a mine can be built and copper production can begin.
“Recycling cannot replace mining for primary copper supply. It is worth pointing out that while the contribution of recycled metals to the global copper market plays an ever-growing role, it is impossible to fully replace copper sourced from hard-rock mines,” Saderholm said. “There is simply not enough historic worldwide copper-bearing scrap metal available to ever become a complete replacement – not even close. Exploration and mining will always be key to meeting the increasing demand for copper, which is expected to double in the next 25 years. Bringing on new mines and optimizing older mines will be essential. Recycling will never realistically fill those looming demand requirements. That being said, the collective copper industry must focus in the short term on optimizing recoveries and refined ore control measures from existing mines, alongside copper-bearing scrap recycling to fill this looming supply void.”