Europe Faces Copper Crunch As China Outbids Smelters

SEATTLE (Scrap Monster): Europe’s copper industry finds itself at the heart of a global tug-of-war, as China’s aggressive buying of scrap metal and shifting Western strategies for critical minerals create new supply chain headaches and policy dilemmas. In the first seven months of 2025 alone, China imported about 204,000 tons of copper scrap from EU nations—a 3.5% increase year-over-year, according to the European Commission’s Raw Materials Information System. That’s nearly half of all European copper scrap exports flowing east, a figure that’s left European smelters, especially in Germany, scrambling for raw materials.

The consequences have been swift and severe. German Economy Minister Katherina Reiche, speaking to Bloomberg News in September 2025, warned, “Large German copper smelters are no longer getting any raw materials” due to China’s purchasing power. The German Copper Institute has echoed these concerns, documenting supply chain disruptions that are rippling through the country’s vital automotive and electrical industries. With copper prices on the London Metal Exchange swinging between $9,000 and $10,000 per tonne over the past year, the stakes for manufacturers couldn’t be higher.

 Why has copper scrap become such a hot commodity? The answer lies in its unique role in the green transition and the circular economy. Copper is perfectly recyclable—according to the Copper Development Association, it maintains its properties indefinitely, making it a cornerstone of sustainable industry. Processing scrap copper requires about 85% less energy than mining new ore, as the International Copper Association reports. That’s a huge win for emissions reduction and cost savings, especially as environmental regulations tighten across Europe and beyond.

But it’s not just about green credentials. Global copper demand is surging, projected to hit 30.1 million tonnes by 2030 (up from 25.2 million tonnes in 2023), driven by electrification and renewable energy projects, according to the International Energy Agency. Meanwhile, traditional mining is getting tougher and

 more expensive—Chile’s Codelco, the world’s largest copper producer, faces rising costs as ore grades decline and mines dig deeper. This has made recycled copper ever more attractive, not just for its lower carbon footprint but for its economic edge.

China’s role in this drama is outsized. Its domestic smelters have expanded rapidly, fueling an insatiable appetite for raw materials. With domestic scrap generation falling short of processing capacity (about 2.3 million tonnes annually, according to industry estimates), China has turned to global markets—especially Europe—to fill the gap. Chinese buyers are consistently outbidding their European counterparts, creating a supply crunch that’s threatening the continent’s manufacturing base.

The situation is further complicated by geopolitics. US-China trade tensions and tariffs have rerouted some American copper scrap shipments through third countries like Canada, Mexico, and Vietnam, making Europe an even more attractive target for Chinese buyers. The collapse in direct US-to-China shipments has intensified the squeeze on European supplies, fanning fears of a broader resource security crisis.

European policymakers are not sitting idly by. The EU has activated a customs surveillance system to track metal scrap movements, covering roughly 200 material categories including copper. The Steel and Metal Action Plan, adopted in 2025, has set a precedent for intervention in scrap metal markets. There are growing calls for a ban on copper scrap exports to certain non-OECD countries by 2027, mirroring restrictions already in place for some waste streams under the EU Waste Shipment Regulation. Industry groups are pushing for immediate restrictions to secure vital copper supplies for European manufacturers.

Integration of scrap retention policies into the Critical Raw Materials Act—which now lists copper among its 34 critical raw materials—could provide the legal foundation for more comprehensive export controls. Enhanced monitoring of trade flows and countermeasures against market manipulation are also on the table, as policymakers look for data-driven ways to manage the crisis.

This isn’t just an economic or industrial story—it’s a question of strategic autonomy. Copper is essential for Europe’s green transition, with the REPowerEU plan alone requiring a 35% increase in copper demand for renewable energy infrastructure by 2030. Retaining scrap supports emissions reduction targets, strengthens domestic industry, and reduces reliance on imports. But it also raises tough questions about the balance between free trade and resource security, as well as the future of Europe’s industrial ecosystem.

There are environmental angles to consider, too. Shipping scrap to China for processing increases transportation emissions—maritime transport generates about 0.5-0.8 tonnes of CO2 per tonne of material moved, according to Maritime Transport Efficiency data. European smelters operate under stricter environmental standards, offering regulatory advantages for local processing. Circular economy principles favor keeping scrap within Europe, creating closed-loop systems that minimize environmental impact and maximize resource efficiency.

 Courtesy: www.evrimagaci.org