Growth in global refined copper production from recycled material is currently outperforming primary sector expansion in 2026, driven largely by increased secondary processing capacity in China. According to preliminary data from the International Copper Study Group (ICSG), global secondary copper production from scrap metal rose by 6.8% in the first four months of the year, while primary production from mined ores grew by a more modest 3.5%. Overall refined copper output increased by approximately 4% during the period, highlighting a structural pivot toward recycled feedstocks as industrial supply chains adjust to shifting trade policies and emerging domestic demand centers.
China Drives Secondary Expansion as Domestic Smelting Softens
The rapid expansion of global recycled copper output is heavily concentrated in China, where investments in secondary smelting infrastructure continue to mature. However, broader copper smelting activity inside the country recently experienced a temporary contraction. Satellite data tracking global smelter operations indicates that Chinese smelting activity declined by 2.5% from April to May, pushing the country’s inactive capacity up to 14.5%. This lull suggests that while long-term scrap recycling processing capabilities are growing, near-term operational adjustments and raw material availability are causing brief fluctuations in operational rates.
U.S. Smelting Activity Rebounds on AI Data Center Demand
In contrast to the recent slowdown in China, copper smelters in the United States have maintained robust operating profiles throughout May. This domestic manufacturing strength is increasingly tied to the rapid buildout of artificial intelligence data centers and the massive electrical infrastructure required to power them. To secure regional supply chains, investment in domestic U.S. copper recycling infrastructure is accelerating. For instance, South Carolina-based startup Red Metals Inc., which maintains strong industry links to Tesla and battery recycler Redwood Materials, recently announced a significant capital commitment to expand local recycled-content copper production capacity.
Warehouse Inventories Hit 23-Year Highs on Tariff Speculation
Despite strong pockets of demand, a massive influx of refined metal into global exchange warehouses is placing a firm ceiling on current copper pricing. Combined inventories across the London Metal Exchange (LME), COMEX, and the Shanghai Futures Exchange (SHFE) surpassed 1.14 million metric tons at the end of May, marking the highest stockpile level seen since January 2003. Warehouse volumes surged by over 400,000 metric tons—a 54% increase—since December 2025, led by a 240,000 metric ton rise at LME facilities and a 130,000 metric ton increase at COMEX. Market analysts note that U.S. traders and industrial procurement managers are actively stockpiling inbound material to mitigate supply chain risks ahead of anticipated trade policy changes and potential import tariffs from the Trump administration.
Market Impact
○ Impacted Metals: Refined copper cathode, secondary copper ingot, No. 1 heavy copper scrap, No. 2 copper scrap
○ Direction: Bearish
○ Time Horizon: Near-term
○ Affected Industries: Electrical utilities, data center infrastructure, electronics manufacturing, automotive, construction
○ Related Price Reports: Copper Weekly Price Report
○ Watch Item: Monitor upcoming U.S. trade policy announcements regarding metal tariffs, as any formal implementation will trigger immediate shifts in COMEX warehouse delivery patterns and regional scrap discounts.
SuperMetalPrice Commentary:
The divergence between surging exchange inventories and robust regional demand highlights a highly fragmented global copper market. While the structural push for recycled content is gaining long-term momentum due to data center expansions and secondary smelting investments, the immediate market is oversupplied. Procurement managers should expect near-term price caps as the historic 1.14 million metric ton inventory buffer absorbs localized supply shocks, making any sudden upward price spikes unlikely before the end of Q3.
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