Copper flies to record highs

Most non-ferrous metal prices have climbed in recent weeks, with analysts  believing the trend is fundamental rather than speculative.

Prices for non-ferrous metals on the London Metal Exchange (LME) have risen sharply in recent weeks. ‘We are currently experiencing an incredible price explosion, especially for copper,’ commented one trader.

Copper was quoted on the LME on 5 January at around US$ 12 840 per tonne for three-month grade copper. The next day, it exceeded US$ 13 260, dropping back slightly on the seventh, the time of writing. Such rates are all-time highs for the red metal. Only three times in recent years (2011, 2022 and 2024) have copper prices exceeded US$ 10 000 per tonne, and rarely for any sustained period. Twelve months ago, they were under US$ 9 000.

Copper inventories in the LME’s licensed warehouses last stood at around 140 000 tonnes.

That industrial metal prices have risen so sharply over the otherwise quiet Christmas period is unusual, as physical trading in most European countries has been very weak since mid-December. Processors were either reducing their inventories or the factories were closed for the Christmas/New Year holidays.

‘NOT SPECULATIVE’

Analysts, however, see fundamental rather than speculative reasons for the high prices, especially copper. Supply shortages in Indonesia, the Democratic Republic of Congo, and Latin America are keeping the price of the red metal high.

‘We suspect that the recent copper rally reflects the fundamentals of supply and demand rather than speculative capital betting on improved global growth in 2026,’ emphasised one market observer.

The situation in the US also plays a role. Analysts emphasise that the high inventories in America are effectively diverted supplies from the European market, compounded by fears that US President Donald Trump could impose tariffs on refined metal imports. Prices are also supported by expectations of further interest rate cuts by the Federal Reserve, as a loose monetary policy tends to boost demand for industrial metals.

CHINESE SCRAP BUYING

In early January, The Financial Times reported claims that Chinese buyers were increasingly buying aluminium scrap, smelting it and exporting it back to Europe as newly produced metal. The newspaper quoted Emilio Braghi, executive vice-president of Novelis, who urged the EU to curb the export of scrap to Asia and the US.

‘We have lost primary production. Now we are at risk of losing aluminium scrap,’ he said. He added that Europe was unique in having consumers willing to pay more for recycled products. ‘We see that pull from consumers, whether they are buying a new car or they are buying an aluminium can, based on high recycled content.’

European Aluminium estimates 15% of EU recycling furnace capacity is idle because of a lack of scrap and the shortfall is said to be about two million tonnes a year. The European Commission is due to make recommendations about the export of metal scrap from Europe later in the year.

ASEAN CROSSROADS

Countries in the Association of Southeast Asian Nations (Asean) are said to be at a ‘pivotal crossroads’ for the trade in aluminium scrap. According to recent analysis from the Shanghai Metal Market (SMM), Thailand, Malaysia, Vietnam and Indonesia are the key importers and typically, face the challenge of pursuing industrial growth while achieving market stability and environmental accountability.

‘The convergence of new trade partnerships with the United States, Canada and China, rising demand for low-carbon products, and volatile commodity prices has placed the region at a pivotal crossroads,’ says SMM. ‘The coming years will test whether Asean can evolve from a fragmented collection of national scrap markets into an integrated, transparent, and climate-aligned metals ecosystem.’

The analysis argues that success requires policy coherence, digital traceability and regional investment in cleaner technologies. Governments must also ensure that small- and medium-sized recyclers are not excluded from the low-carbon transition.

‘In this sense, aluminium scrap is no longer a peripheral commodity but a strategic industrial feedstock central to Asean’s circular economy future,’ SMM adds. ‘By treating recycling as part of the region’s critical-minerals security architecture, Asean can strengthen both its trade position and sustainability credentials.’

In 2024, the region imported 13.3 million tonnes (Mt) and exported 7.1 Mt of aluminium scrap. Thailand dominated regional imports with 7.9 Mt (59%), followed by Malaysia (2.9 Mt, 22%), and both Vietnam and Indonesia (1.2 Mt each, 9%). They accounted for 99% of total scrap imports in the region.

CHINA EXPORT LICENCES

A requirement in China for exporters to secure licences for lithium battery materials was introduced in November. According to China’s Ministry of Commerce and General Administration of Customs, the ruling also covered cathode materials, related equipment and production technology.

The move was reported in the latest BIR Mirror by non-ferrous board member Shen Dong of the US OmniSource Corporation. He also pointed out that since imports of recycled black mass for lithium-ion batteries came into effect on 1 August after trial imports, 200 tonnes of black powder had successfully cleared Chinese customs at the port of Ningbo in early October.

Meanwhile, Shen wrote, China’s Ministry of Industry and Information Technology and other departments published a plan to curb overcapacity and competition. ‘The plan targets an annual output growth of just 1.5% for primary non-ferrous metals – a significant reduction from previous goals. A major component of the new plan is to enhance recycling initiatives, with the aim of exceeding an annual output of 20 million tonnes of recycled metals.’

LME POSITION MANAGEMENT

In December, the LME published an update setting out its approach to commodity market management and how it intends to implement the UK’s new regime on position limits. The background to the new regime was the seismic shock of extreme volatility in the LME’s three-month nickel futures market in 2022.

It culminated in the early hours of 8 March with the nickel price over US$ 100 000 per tonne, more than double the closing price of the day before, with most of the rise occurring in little over an hour.

In March 2025, the UK Financial Conduct Authority (FCA) fined LME £9.2 million (EUR 10.6 million) for failing to ensure its systems and controls were adequate to deal with severe market stress. It was the first enforcement action the FCA has taken against a UK-recognised investment exchange. The LME accepted the findings and qualified for a 30% reduction in its financial penalty.

According to the FCA in March 2025, ‘The LME’s systems and controls were not adequate to ensure orderly trading under conditions of severe market stress. LME did not have adequate controls or policies relating to the operation of its automatic volatility controls, its ‘price bands’.

From 6 July, responsibility for setting and administering position limits, exemptions and other position management controls will transfer from the FCA to the LME. ‘This will strengthen the LME’s ability to calibrate and manage limits directly, ensuring they remain appropriate and responsive to market dynamics,’ the LME says.

A consultation paper on proposed rule changes to accommodate the new regime is planned for February.

RECORD CHINA EVS

The China Association of Automobile Manufacturers reported that China’s monthly automobile production exceeded 3.5 million units for the first time in November 2025. In the first 11 months of the year, the production and sales of automobiles surpassed 31 million units, with year-on-year growth all exceeding 10%.

Over the same period, exports of electric vehicles reached 2.315 million units, doubling the 2024 total. Production of EVs approached 15 million units between January and November, a year-on-year growth exceeding 30%.

COPPER

Prices on European scrap metal markets are currently difficult to assess at the time of writing, as many markets had not reopened. At New Year, prices for bright copper wire scrap were around US$ 11 660 per tonne, while chopped copper wire scrap fetched US$ 11 720 in first grade and US$ 11 360 in second grade. Unalloyed wire scrap cost around US$ 10 950 and heavy was priced at US$ 10 780.

ALUMINIUM

Aluminum also benefited from the upward trend on the LME, exceeding US$ 3 000 per tonne. The metal was last quoted at around US$ 3 050. Visible aluminum inventories in LME-licensed warehouses declined from 547 225 to 506 750 tonnes during the reporting period.

The aluminum scrap market remained challenging. Scrap supply remained high, while mill demand was weak. The turn of the year also played a role as many mills had announced in mid-December that they would temporarily suspend new business. Consequently, recycling companies icomplained of extremely high inventory levels.

Extrusion scrap fetched around US$ 2 810 at year-end. New low copper aluminum scrap was priced at US$ 2 050, and pure wire scrap was traded at around US$ 2 820. Shavings brought in US$ 1 350.

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