Will critical status affect copper scrap trade?

The past several years have seen governments around the world erect hurdles to the cross-border trade of scrap materials, including several grades of copper-bearing scrap.

Some of the governmental action has been spurred by concerns raised by less environmentally friendly or more difficult to recycle materials “coming along for the ride” when copper-bearing scrap is shipped.

That dialogue has resulted in nations like China and Malaysia greatly tightening their specifications for imported red metal scrap.

These follow-up actions have made baled wire and cable less commonly traded across borders, with mixed grade loads also receiving greater scrutiny.

Recyclers in Europe have expressed concern that the EU is adding to the hurdles by requiring additional paperwork and permissions for Europe-based recyclers to ship material outside the economic union.

More recently, a form of “resource nationalism” has gained traction, with nations creating lists of metals and other materials deemed critical, strategic or otherwise vital to the national interest to an extent where trade cross-border trade could become problematic.

In the European Union, recycling associations are lamenting the expansion of the EU’s critical raw materials (CRMs) list to include a second category called strategic raw materials (SRMs). That second category now includes copper.

European recyclers of numerous materials have become wary of resource protectionism as creating a system wherein European melt shops (and paper mills) are weaving a system that will restrict recyclers from having free or fair access to the global market—and global prices—for scrap materials.

The Brussels-based European Recycling Industries’ Confederation (EuRIC) issued a statement last month raising the alarm on the SRMs list and what EuRIC considers the lack of a transparent methodology.

“The recent last-minute endorsement for the formation of a secondary list of [SRMs] raises several questions,” the organization states. EuRIC says the category seems to have been unveiled without sufficient data, which it says sets an alarming precedent for the unrestricted addition of materials to the list, lacking clear conditions or a methodology for assessment.

“We need a robust and evidence-based framework for classifying strategic raw materials and not the creation of countless lists that are biased and devoid of substantial value addition,” EuRIC Secretary General Emmanuel Katrakis says.

While American nonferrous scrap processors and traders could see few such hurdles in the current environment, in August, the U.S. Department of Energy officially added copper to its Critical Materials list.

According to the Virginia-based Copper Development Association (CDA), which represents copper mining and red metals production firms, “This act marks the first time a U.S. government agency has included copper on one of its official ‘critical’ lists, following the example of other countries including the European Union, Japan, India, Canada and China.”

Andrew G. Kireta, Jr., president and CEO of the CDA, said shortly after the announcement, “The nation would be defenseless without electricity and copper’s vital role in its generation, transmission and distribution. The U.S. should do all it can to protect and promote our domestic copper industry.”

In the U.S., there might not be any structured parallel between a “critical” designation and protectionist measures. However, as in the EU, the designation could provide a peg for those seeking a protectionist measure to prevent outflows of certain semifinished or scrap materials.

At a convention earlier this year, members of the Brussels-based Bureau of International Recycling met to discuss the critical materials issue, with Robin Wiener of the Washington-based Institute of Scrap Recycling Industries warning fellow recyclers and association leaders, “We need to be a part of this discussion and not get left behind. We should develop a strategy of how we work together.”