What copper's scrap crisis signals for aluminum

Early this year, Chinese buyers were loading up on US copper scrap because concentrate supply collapsed after First Quantum’s Panama mine shut. US scrap exports to China jumped 37% through April. Big number.

Now, that flow is freezing.

CME prices blew past $11,000 per ton in May and killed the arbitrage. LME is trading much cheaper. Chinese buyers will not pay CME premiums anymore. They are deferring shipments or trying to reprice off the LME. A lot of US scrap is now stuck at home.

Domestic buyers are not stepping up. Most deals are formula based through brokers. Spot is almost dead. Mills are quiet. Weiland is buying a little in Buffalo, but they are long and pushing deliveries out. Lead times are stretched, and logistics are jammed.

Next comes the export-control threat. The Copper Development Association is pressing Washington to ban high-grade scrap exports. Commerce has a Section 232 probe under way. Recommendations are due by late November, so any ban could land late this year. If that door closes, even more material stays trapped here, spreads widen, and sellers take another hit.

Freeport reinforced the warning. The company told regulators that tariffs and restrictive trade policy may give prices a short pop, but they scare off investment in US mining and smelting. Less domestic primary production means the system leans even harder on scrap just as policy is choking the scrap outlet.

This is not normal volatility. It is a market break. CME and LME are miles apart. Buyers and sellers cannot meet. Traders are walking away from forward positions. The downstream impact has not fully hit yet.

Why should aluminum care?

Copper is the warning shot. The same export bottlenecks, tariff fallout, domestic oversupply, and price dislocation can hit aluminum. If copper scrap backs up, it drags down pricing on other non-ferrous loads. Yards that count on copper spreads to make their month will start pushing more aluminum, especially clean material that moves faster.

Processors are already triaging what they bother to sort. If copper is not paying, labor and line time pivot to whatever moves. That can hurt aluminum quality and availability.

Remember the shared infrastructure. Copper and aluminum often move through the same shredders, docks, and trucks. If copper sits and aluminum has to route around it, freight costs climb, delays pile up, and tempers flare.

Extruders, sheet mills, and secondary casters all need clean, reliable metal. If the copper mess spills over, expect ripple effects on timing, volume, and quality.

Copper scrap is breaking in slow motion. Aluminum has a chance to learn from it before the same thing happens to it.