A sea of unused copper scrap piled up quietly across U.S. yards for weeks, until a 90-day ceasefire in the U.S.–China trade war offered an escape route. As tariffs are temporarily rolled back, exporters are scrambling to re-establish long-stalled trade flows, especially in industrial commodities like scrap copper. 

While the relief is tangible, uncertainty still clouds the longer-term picture. Ana Senic, a financial strategist at Horizon28, unpacks how this truce could shake up supply chains, pricing dynamics, and the global copper market as a whole, while cautioning that resolution may be further off than the headlines suggest.

A Pause That Moves the Pile—But Not the Problem

In Salt Lake City, a mountain of 300,000 pounds of scrap copper—from old appliances, razed buildings, and junked cars—has sat idle at Utah Metal Works. That backlog, representative of countless yards across the country, built up after U.S. copper scrap shipments to China halted amid rising tariffs. Now that both countries have agreed to temporarily lower levies for 90 days, exporters are rushing to fulfill backlogged orders.

But even with phones ringing and deals restarting, industry veterans say the deeper logistical and structural damage from the trade war can’t be fixed in a quarter. The temporary tariff rollback may unclog physical flows, but it won’t instantly reset disrupted relationships or reverse months of deferred contracts.

​​

Scrap Copper’s Global Role—and America’s Trade Limbo

Copper is often described as a barometer of global economic health due to its vast use in electric vehicles, construction, and energy infrastructure. And scrap copper accounts for roughly one-third of global supply, making its free flow essential, particularly as mined copper becomes scarcer and smelters scramble to meet demand.

In 2024, the U.S. exported 600,000 tons of copper scrap, with over half bound for China. But when tariff escalations kicked in, that vital artery in the supply chain was severed. The result?

• U.S. yards were forced to sell metal at record discounts.
• Chinese processors, long reliant on American scrap, struggled to secure alternatives.
• No. 2 grade U.S. copper scrap began trading at a record discount of 92.5 cents per pound relative to futures, the widest margin ever, according to Fastmarkets.

China, as the world’s largest refiner of copper, accounting for over half of global output, suddenly lacked one of its major scrap sources.

Tariffs Were Just the Beginning

The backlog and pricing dislocations didn’t occur in a vacuum. Policy actions have reshaped global copper flows. Earlier this year, America’s current president ordered a Commerce Department investigation into tariffs on all copper imports, not just scrap. While the goal was to enhance domestic control over copper supply, it created more uncertainty in a market already strained by insufficient U.S. smelting capacity.

Though the U.S. exports large volumes of scrap, it imports much of the refined metal it consumes. That imbalance—combined with high domestic futures prices—has discouraged buyers abroad, even when discounts on scrap widened.

The result: scrap sat idle, smelters delayed procurement, and global inventories became misaligned, deepening volatility across the copper ecosystem.

Short-Term Fix, Long-Term Puzzle

The 90-day U.S.–China truce has unlocked some of that gridlock. Calls between U.S. dealers and Chinese buyers have resumed, and shipments are slowly moving again. However, the challenges go far beyond tariffs:

• Logistics and shipping channels disrupted during the conflict are still recovering.
• Thin margins in the scrap import business mean even lowered tariffs may not make deals profitable, according to Chinese researchers.
• Global smelters, especially in China, are under intense cost pressure, with treatment fees dipping into negative territory, pushing some to consider production cuts.

“There’s movement now, but it’s fragile,” said one commodities analyst. “Every step forward depends on what happens when the clock runs out.”

The Pricing Paradox and Futures Disconnect

One of the more perplexing effects of the trade conflict has been the disconnect between physical and futures markets. Despite scrap trading at deep discounts, the Comex copper futures contract surged due to speculation around potential metal-specific tariffs and broader supply fears.

That meant U.S. scrap was both cheap at home and expensive globally, complicating its attractiveness to international buyers.

As Ana Senic notes, “Markets hate contradiction. The copper story right now is pricing like a squeeze and acting like a glut. That doesn’t resolve overnight, no matter how many tariffs you pull back.”

Outlook: Will the Music Stop Again?

While some exporters have managed to redirect cargoes to markets like Japan and Taiwan, demand from those regions hasn’t been sufficient to absorb what was once destined for China. And there’s no guarantee the current momentum will last if the 90-day window closes without progress.

For now, scrap copper is moving again, and the price pressures have eased slightly. But traders, processors, and policymakers remain aware that the music could stop at any moment.