ISRI2023: Critical copper

Copper is poised to benefit from the electrification trend. However, the United States, as the largest exporter of copper scrap and the largest importer of refined copper, could find itself in a precarious position unless it addresses this situation.

That was the assessment of the panelists who presented during the Spotlight on Copper session at the Institute of Scrap Recycling Industries (ISRI) 2023 Convention & Exposition in Nashville, Tennessee in mid-April.

John Gross of Huntington, New York-based J.E. Gross Consulting Inc. and The Copper Journal, said copper consumption doubles every 25 years, which is in line with projections that many analysts have been making looking ahead to the mid-2030s.

RELATED: Copper Development Association analysis shows copper should be included on US Critical Minerals List

While China, the world’s second-largest economy in terms of gross domestic product (GDP), is the world’s largest consumer of refined copper, accounting for 56 percent of global consumption in 2022, the U.S., the world’s largest economy by GPD, consumed only 7 percent, Gross said. The figures looked quite different in 2000, when the U.S. consumed 20 percent of the world’s refined copper. At that time, China did not rank within the top five largest economies, but it accounted for 12 percent of refined copper consumption. By 2002, it had surpassed the U.S. to become the largest consumer of refined copper, Gross said.

“The United States depends on refined copper for fully half our consumption," he added. "That’s a bad place to be."

In addition, the U.S is the largest exporter of copper scrap, he said, at 18 percent, a trend that began in  2001 with the closure of the last secondary copper smelter in the U.S. Gross said that scrap “should be staying here to make product in the U.S. I know a lot of people don’t like to hear that.”

Fellow panelist David Schilberg of Prime Materials Recovery Inc. (PMR), East Hartford, Connecticut, agreed. “In order for the United States to remain a global economic leader, we can’t continue to export our raw materials,” Schilberg said. “To continue growth, raw materials must remain in the United States. It's imperative and, with the shift that's occurring, I think it's possible.”

PMR together with the Spanish company Cunext began production at Ames Copper Group, Shelby, North Carolina, in 2022. Schilberg said Ames can produce 50,000 tons of 99.7 percent pure copper anode using scrap that contains as little as 93 percent copper. The recycled anode is supplied to another company that uses it to produce cathode.

Schilberg said copper scrap volumes have been reduced across the board in 2023, though more slowing has been seen on the retail side than on the industrial side. However, industrial scrap generation also has started to slow. He said the slowdown, which could be related to the shift in Federal Reserve policy, was concerning.

Despite that, Schilberg said he remained “extremely bullish regarding secondary copper” and the resurgence the U.S. is seeing in this area, with Wieland and Aurubis also announcing projects in the U.S. to consume copper scrap.

Matt Bedingfield, president of Wieland Recycling North America, Granite City, Illinois, also addressed Spotlight on Copper attendees. He said that as a 200-year-old private company, Ulm, Germany-based Wieland can take very long-term view of the market. “We want to thrive for another 200 years.”

Regarding sustainability, Bedingfield said, “We really view it as our license to operate going forward. And that's why our capital, and our energy, is getting put there.”

He said the company’s secondary metals smelter that is being constructed in Shelbyville, Kentucky, will be able to consume scrap that contains 85 percent copper at a minimum to produce a “true cathode-type substitute.”

He added, “We believe it will open up recycled-content material to markets that haven’t been able to use it in the past.”

Bedingfield added that for all the products that use copper, from electric vehicles to sustainable energy applications, using sustainable metal is going to be important. “We believe that's an important thing to give to our customers. To accomplish this, we can't do this alone. We need the people on this stage, we need people in this room. It's a bigger problem than any one company is going to be able to solve.”

In the last 10 to 15 years, Gross said production and consumption of refined copper in the U.S. have been declining, though he said he believes that trend is about to reverse in light of investments that Ames and Wieland are making. “We're going to see rising trends in production and consumption of copper. And I believe that's going to convert into seeing things at Lowe's and Home Depot more and more frequently that are going to say made in America.”

That trend will need to be enabled by adding copper to the U.S. Critical Minerals List, Gross said, which contains minerals deemed essential to U.S. economic or national security that have supply chains vulnerable to disruption.

All three panelists agreed that copper is a crucial mineral and that more copper scrap needs to remain in the U.S.

Gross said this can be done in two ways: higher prices or export controls.

Schilberg said that even if the metal is added to the U.S. Critical Minerals List, that doesn’t ensure the material won’t be exported.

“It’s on us to be competitive and figure out how we can make people like yourself want to sell some or all or some percentage and sort of start to diversify your sales to us," Bedingfield said. "So, we have to do that. We need to do that through efficiency. And, sometimes, we need to do it through price. So we understand that that's the way it goes.”