NF recycled metals optimization at its best

Since the non-ferrous sector of the recycled metals industry still can’t make out what the future looks like for their side of the metals industry, or at least for the next six months, we turn to the base/primary metals to try and shed some light. After all, our pricing is based off of base metals, so it seems like a natural turn.

The total copper production in Chile is showing a 1.7% gain year on year, as listed in CRU. While this does sound great, it’s a 10% drop in output for Codelco, which is the largest producer of copper in the world. They’ve been navigating their own issues, on everything from fatal accidents to strikes, but the real problem is that ore grades are declining. Although they have a very aggressive plan to get back to a 1.7-million-ton production level by 2030, that’s a long way away. The industry is going to need every ton of copper that they can get. Demand is rising, which of course is driven by EVs, natural renewables, solar power, and wind power, and this stuff isn’t coming at a better time. If anything, I think you’ll see all of this increasing demand start to erode primary supply and we will see more primary copper supply coming from scrap to meet those shortfalls. The shortfall in supply will put pressure on the price and that’s where we come in on the scrap side. That’s when demand increases, and the scrap part of the industry would have the ability to fill that hole when primary producers are falling down. Now, seeing as this would drive up primary copper prices, how do you think this will affect recycled metals prices? Will we see recycled metal prices surpass primary prices? That is, of course, if there is actually enough scrap to go around.