According to the BIR’s World Mirror Report on the Non-Ferrous Market, the challenges from the energy crisis, high inflation rates and EU waste shipment regulations will continue to remain in the new year. In his comment, Dhawal Shah, president of the BIR Non-Ferrous Metals Division, has said, “The energy prices have edged from their peaks but bills remain high and gas/electricity availability is not always as we would wish it to be; inflation remains a thorn in the side and is clearly deterring public expenditure, forcing industry - and notably the key automotive sector - to implement production cuts along the pipeline; and labour supply in many countries is simply failing to keep pace with demand.”

The resolution adopted on January 17 with regard to the EU Waste Shipment Regulation promises an even heavier bureaucratic burden on the recycling industry in the guise of stricter inspection/ audit requirements.

Despite the fact that the global outlook remains uncertain, analysts predict that copper prices will rise again later in 2023. And the growing demand for Electric Vehicles and renewable energy are expected to give copper the muchneeded fillip.

Muzammil Haji Amin Gadawala, President, ALA International FZE, is confident that given the kind of demand that is expected, the copper market will see a growth of about 10% globally in 2023 and year on year 5 to 10% growth can be expected. He says that the market will overcome the current challenges from the Trafigura case, the Russian-Ukraine war and European energy crisis.

“Many copper-intensive industries and copper plants are coming up across the world. The demand for copper is going to be there. The demand for electric vehicles and push for renewable energy will help the industry and stabilise the maket,” he pointed out.

“After China restricted the import of waste into the country, the cross border trade of scrap changed completely. Now India is also likely considering a ban on imports of waste. But scrap will be allowed with some kind of restrictions and specifications,” he added.

Calling China as the manufacturing superpower, he noted that the country has a huge demand for the red metal and that’s sustaining the market. “But after China’s restrictions on import of scrap, we have started supplying copper ingots,” he said.

Talking about the Middle Eastern market, he said, the UAE and Saudi are setting up several industries, which will increase the demand for copper. “Copper smelting industries are coming up, but the region does not generate sufficient copper scrap. “The UAE has banned export of ferrous and paper scrap. It might even consider restricting the export of copper and aluminium. I will not be surprised if 100% scrap consumption is achieved within the country.”

He welcomed the inclusion of recycled metal by the primary producers in their finished products. Further, the decarbonisation efforts are transforming the recycling industry. “The world is fighting global warming and intends to move towards a circular economy. And today’s technological developments are also aiding the process. These efforts were absent 20 to 30 years and it’s good sign.”

From the perspective of India, Mayank Pareek, Managing Director, Jain Metal Group, said that copper demand is going to rise in India in 2023 as Indian economy in general is growing. “Indian production of electronic and electrical goods is renowned and in demand. Government’s scheme of Production Linked Incentives to mobile industry, electronic goods industry, copper tube for AC, etc. has led to substantial capital expansions in these fields. All these fields are witnessing galloping export trends.” He noted that the EV concept, especially in the twowheeler segment, is catching up in India and that it will benefit the copper recycling industry. Increased push for renewable energy is leading to a situation of power adequacy. This, combined with the effort of the Government to electrify the entire country by bringing power to the remote areas deprived of electrification so far, is leading to huge demand of copper products in the country. Push to EV definitely gives a push to demand of copper in the country. Higher demand of copper in the country is surely going to give a boost to copper recycling.

Pareek also pointed out that Indian copper smelters, as a substitute to ore, have started consuming a lot of copper scrap in their production.

Talking about the challenges in India, he said, “Primary producers in the country feel threatened by the growth of recycling. They are engaged in intense lobbying with various ministries in the Government with an objective to suppress recycling. They want a hike in import duties. They want stringent standards to be defined for copper scrap by Bureau of Indian Standard (BIS), etc. Recycling industry has a weaker muscle power. Hence it should fight harder against this campaign based on misleading information.”

Salman Shaban, Director, Lucky Star Alloys, said, “In 2023, the copper market is likely to be impacted by several macroeconomic factors such as rising inflation, a global energy crisis, and supply chain disruptions, which can led to increased demand for copper as a safe-haven asset and as a component in renewable energy systems.” For instance, the outlook for global economic growth, especially in major copper-consuming countries such as China and the United States, will play a critical role in determining demand for the commodity. Additionally, the adoption of new technologies such as electric vehicles and energy storage systems is expected to increase demand for copper, as these products require significant amounts of the metal for their manufacture, he added. “However, there are also potential risks that could impact the copper market negatively, such as a further escalation in global trade tensions, geopolitical risks, or environmental regulations that could limit copper production or increase its costs.”

Speaking about the challenges, he noted that the declining copper LME can make it difficult for recyclers to make a margin after paying the collection and processing costs. “The copper recycling industry faces stiff competition from primary copper producers who can produce recycled copper at a lower cost.” He also mentioned that the contamination of copper with other elements makes it difficult for recyclers to add value into the processing cycle. Further, the increasing regulatory market makes it challenging to cope with the ever changing landscape of the regulations. Shaban spoke about how decarbonisation and net-zero efforts are transforming the industry.

“The global decarbonization effort will increase the demand for recycled copper that has a lower carbon footprint. The increasing demand of copper in renewable energy systems and electric vehicles will lead to a global opportunity for the copper recycling industry,” he said, adding “Technological companies can take advantage by producing more efficient machinery and plants to meet the increase in demand for recycled copper.”

As the regulatory bodies are moving toward the decarbonisation of copper industry, it is also driving the demand of copper to be used in renewal energy systems, solar panels and electric vehicle components. The demand for recycled copper will continue to rise in the coming years specially as the Carbon Based Adjustment Measures (CBAM) takes its shape over the course of next few years, he noted.

Shaban noted that technology will havev to continuously upgrade itself to be more effective in recycling copper. We can see the integration of AI tools in the sorting process, energy efficiency and the delivery process of the recycled copper.

Positive Outlook

According to Jurgen Van Gorp, Account Manager, Raw Materials at Aurubis Beerse, the outlook for 2023 remains positive, so is the general outlook for the coming years. He attributed this to higher demand from expected increase in economic activity after China’s Zero-Covid policy relaxation and green energy transition.

He highlighted how this could prove beneficial for the recycling industry. “A positive challenge is the push for more recycled content in the products. Efforts to reduce the carbon footprint is a great opportunity for the recycling industry,” he said, adding, “However with this push for higher recycled content comes the question of where all the copper will come from.” Van Gorp drew our attention to the persisting challenges from the RussiaUkraine War and the looming threats of recession across the world. “If there is no consumption, there will be no scrap.”

He said that the EV boom could have a positive impact on the copper recycling industry, adding, “Different types of scrap/byproducts are also finding their way into the scrap stream from the production of EV and EV-related appliances.

The current recycling technology is not equipped enough to process these scrap materials.” So, the push for EV should be complemented by development in recycling solutions and future-ready technological innovations, he noted.

Speaking about the technological trends, Van Gorp said the miniaturisation of components and the introduction of the element carbon in the battery foil industry are welcome trends which will push for creativity in recycling operations. And this is vital to deal with the growing volumes in an economically and sustainably-viable manner.

In his comment, in the BIR World Mirror Report, WWShen Dong, OmniSource Corporation (USA), Board Member of the BIR Non-Ferrous Metals Division has said that China’s zero-COVID policy has been slowing the world’s second-largest economy since the beginning of the pandemic.

Therefore, its recent dismantling is paving the path for an economic recovery; cities and provinces are setting aggressive growth targets for 2023, some as high as 5%. In Jan - Nov 2022, Chinese markets recorded an import of recycled copper and brass raw materials climbed 6.61% to 1.632 million tons, with the largest overseas source being the USA which provided 297,000 tons or 18.2% of the total.

Speaking about Japan in the BIR report, Nick Hinohara, Metal Solution Provider (JPN), Board Member of the BIR NonFerrous Metals Division, has commented that the country recorded its biggest trade deficit in 2022, mainly the result of much higher import costs for energy. Higher energy bills are believed to have begun affecting the financial results of Japanese companies in the current fiscal year.

“Copper rolling mill production recorded year-on-year declines for 12 consecutive months leading up to December owing mainly to the slump in demand from the Chinese phone industry, although a slight recovery has been seen from the domestic automotive sector.

The local market for No. 1 copper scrap has become dull, with reduced generation and less demand from mills. Trading in No. 2 copper scrap has been relatively active, supported by demand from Chinese smelters.

Sidney Lazarus, Non-Ferrous Metal Works (ZAF), said, the outlook is still very challenging as businesses returned only in mid-January from the holiday period. Load shedding on a daily basis for between 10 and 12 hours (Stage 4-Stage 6) is still affecting the economy, especially manufacturing industries, while electricity public utility Eskom is continuing to struggle with maintenance and breakdowns at its power stations. The six-month export ban on copper, brass, gunmetal and ferrous scrap is in place.