Copper Recycling: What Contribution Can it Make to Closing the Looming Gap Between Global Copper Demand and Supply?

A number of recent studies indicate a growing disparity between global copper demand and available supply. The extent of the copper supply-demand gap depends on two key factors: the pace of the global transition to renewable energy and the speed at which new copper mines can be developed. If the energy transition proceeds with the goal of achieving net-zero emissions by 2050, and development of new mines continues at the pace observed in the past decade, a persistent annual copper shortfall of 3 to 6 million tonnes (Mt) is projected between 2030 and 2040 and potentially beyond, according to S&P Global’s report, “The Future of Copper.” Improving the recovery of scrap copper for recycling could play a significant role in narrowing this gap. The first step in assessing this potential is to determine the current recycling rate of scrap copper. This article finds that 38% of old copper scrap is currently being recovered, an improvement from the 25% recovery rate seen in the 1990s and 2000s. This progress appears to be driven by a combination of higher copper prices, supply constraint during China’s high-rise construction boom in the 2010s, and the advancements in scrap recovery technology. To contribute 3 Mt annually toward closing the projected shortfall, the recovery rate would need to rise from 38 to 62%. While there are no major technical barriers to achieving this, the main challenges lie in the higher associated costs and a lack of economic incentives. However, as the copper shortage becomes more acute, it is expected that market motivation will increase, and higher prices will help offset the costs of improved recycling.