The report, titled “Recycling of Critical Minerals: Strategies to scale up recycling and urban mining,” named copper as a critical metal for which recycling must accelerate to meet surging demand from the green energy transition, to prevent a shortage of the material stifling the build-out of renewable energy infrastructures.
The IEA report, published on Monday November 18, recommended a multi-pronged approach to boost copper recycling. This should include improving collection rates, mandating recycling, advancing sorting technologies, and investing in secondary smelters, it said.
The agency also advocated for strategic collaborations between industry stakeholders to improve efficiency and to increase the volume of copper being recycled.
Looming supply concerns
Projects already announced would fall short of meeting 70% of projected demand by 2035, according to the report. Although the availability of copper scrap was expected to increase until 2030, it would subsequently fall behind demand growth, the report forecast.
Scrap volumes were projected to increase to 19 million tonnes by 2030 and to 27 million tonnes by 2050, from 16 million tonnes this year, potentially covering only three-quarters of expected demand, the report said.
Market participants that Fastmarkets spoke to at the Bureau of International Recycling (BIR) conference in October said that supply tightness could lead to even narrower scrap discounts in 2025.
Fastmarkets’ monthly price assessment for No1 copper material, RCu-2A,1B (candy/berry), cif China, LME/Comex discount, was most recently at 13-22 cents per lb on October 28, averaging 13-20 cents per lb for the year to date.
The corresponding monthly price assessment for No2 copper material, RCu-2B (birch/cliff), cif China, LME/Comex discount, was 22-35 cents per lb on October 28, averaging 21-32 cents per lb for January-October 2024.
Historically, the copper industry has relied heavily on primary production to meet growing demand, with the use of copper scrap being at a plateau since 2015.
But a significant surge in end-of-life scrap after 2030 could help to alleviate some of these supply pressures and to support secondary copper usage, the IEA said.
Scrap from electric vehicles (EVs) and energy storage systems was likely to increase more than 35-fold between 2030 and 2050, the report showed.
Consequently, the share of secondary copper used was expected by the IEA to jump to nearly 40% by 2050 from 17% today.
Asia to remain key in copper recycling despite regulation
China will remain the largest supplier of secondary copper, according to the report, accounting for approximately half of the average global supply since 2015. Secondary copper production grew to 3 million tonnes in 2023 from 2 million tonnes in 2020.
The country has also been the world’s largest importer of copper scrap by volume since 2023, with most of the material coming from the US.
China excluded, 45% of Asia’s copper consumption was being met by scrap, driven largely by high demand in Japan and South Korea – which were also major importers of copper scrap from the US and Europe.
While Malaysia, Thailand, Vietnam and India have historically absorbed lower-grade scrap, tighter import regulations in some of these nations have underscored the need for increased domestic processing capacity for low-grade copper scrap in Europe and the US.
Conversely, in the EU, the majority of scrap metal produced was classified as waste, which created challenges for exports to China, especially after the implementation of the revamped Waste Shipment Regulation (WSR) in 2024.
From May 2027, a new WSR will ban exports of scrap metal categorized as waste to all countries outside of the Organization for Economic Co-operation and Development (OECD).
Currently, only one-quarter of the EU’s scrap was traded with countries outside Europe, according to the IEA.
The IEA warned that, while new regulations may support domestic copper scrap processors in Europe, the move might ultimately limit global copper scrap supply, if secondary smelting capacity did not expand swiftly enough.
Moreover, the agency also noted that Europe’s growing investment in secondary copper production could be challenged by higher energy costs, and secondary smelters were more vulnerable to price volatility than their primary counterparts.