Scrap Report

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The U.S. Copper-base Scrap IndustryAnd Its By-products

An Overview

Ninth EditionJanuary 2009

Copper Development Association Inc. 260 Madison AvenueNew York, NY 10016

(212) 251-7200www.copper.org

Janice L. JollyDayton, Maryland


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TABLE OF CONTENTS

EXECUTIVE SUMMARY ................................................................................................................................... 1

CHAPTER 1 INDUSTRY PERSPECTIVESGlobal Industry Perspective .................................................................................................... 6

World Copper Consumption and Production ............................................................. 6World Trade in Copper Scrap .................................................................................... 9World Production and Trade in Copper Alloy Ingot ................................................. 12

Domestic Industry Perspectives ............................................................................................ 12Domestic Uses for Copper ...................................................................................... 12U.S. Consumption of Copper .................................................................................. 13U.S. Trade in Copper and Copper Alloy Scrap ....................................................... 15U.S. Export Controls on Scrap ................................................................................ 16

Products and By-products Produced from Scrap .................................................................. 16Wrought Copper and Copper Alloys ........................................................................ 16Brass and Bronze Ingots ......................................................................................... 17Refined Copper ....................................................................................................... 18Copper Anodes for Plating ...................................................................................... 18Black Copper ........................................................................................................... 18

Copper Chemicals and Powders ............................................................................. 19Secondary Copper By-products .............................................................................. 19Baghouse Dusts ...................................................................................................... 20Other Metal Recovery ............................................................................................. 20Items that Go to the Landfill .................................................................................... 20

Description of the U.S. Secondary Industry .......................................................................... 20Brass Mills ............................................................................................................... 22Foundries ................................................................................................................ 22Ingot Makers ............................................................................................................ 23Secondary Smelters and Refiners........................................................................... 23Hydrometallurgical Plants ........................................................................................ 23Metal Finishing Facilities ......................................................................................... 23

Flow Materials ....................................................................................................................... 23Summary of Scrap Flow .......................................................................................... 23

CHAPTER 2 OVERVIEW OF SCRAP SOURCES AND TYPESScrap Sources and Types ..................................................................................................... 26EPA Secondary Product Definitions ..................................................................................... 26Consumption by Scrap Type ................................................................................................. 27Volumes of Scrap Generated ................................................................................................ 29Use of Home Scrap ............................................................................................................... 31

At Brass and Wire Mills ........................................................................................... 31At Secondary Smelters and Refiners ...................................................................... 32At Foundries ............................................................................................................ 32

Use of Purchased Scrap ....................................................................................................... 32Life Cycles and the Theoretical Resource for Scrap ............................................................. 32

Resource Theory and Calculations ......................................................................... 33

CHAPTER 3 OVERVIEW OF SCRAP PREPARATION, MELTING AND PROCESSINGScrap Preparation ................................................................................................................. 39Laboratory Testing ................................................................................................................ 40Energy Use ........................................................................................................................... 40

For Scrap Preparation ............................................................................................. 41Melting Scrap .......................................................................................................... 41

Scrap Melting and Processing .............................................................................................. 41Melt Control ............................................................................................................. 42Drosses and Dross Formation ................................................................................. 42


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Melt Covers (Fluxes) ............................................................................................... 42Use of Deoxidizers .................................................................................................. 43Vapor Losses .......................................................................................................... 43Particulate Matter and Fugitive Emissions .............................................................. 43

Furnaces ............................................................................................................................... 44Arc Furnaces ........................................................................................................... 44ASARCO Furnaces ................................................................................................. 45Crucible Furnaces ................................................................................................... 45Blast Furnace, Cupola ............................................................................................. 45Reverberatory Furnaces .......................................................................................... 45Converters ............................................................................................................... 46Rotary Furnaces ...................................................................................................... 46Low-frequency Induction Furnaces ......................................................................... 46

Sweating ............................................................................................................................... 46

CHAPTER 4 ENVIRONMENTAL OVERVIEWBasel Convention .................................................................................................................. 47

OECD Rulings ......................................................................................................... 48CERCLA Overview ............................................................................................................... 48

Hazard Ranking System (HRS) ............................................................................... 49Resource Conservation and Recovery Act ........................................................................... 49Toxicity Characteristic Leaching Procedure (TCLP) ............................................................. 50

Suggested Improvements for the TCLP .................................................................. 50Multiple Extraction Procedure (MEP) ...................................................................... 52

Hazardous Wastes ................................................................................................................ 52Toxic Release Inventory System (TRIS) and Other Databases ............................................ 52Lead in the Workplace Directives (OSHA) ............................................................................ 53Clean Air Act Ruling .............................................................................................................. 53

CHAPTER 5 PROBLEMS AND SOLUTIONSThe Problems ........................................................................................................................ 55Industry Solutions ................................................................................................................. 56

Process Recovery Corp. ......................................................................................... 57Management Systems and ISO Standards ............................................................. 57Electronic Scrap ...................................................................................................... 58Lead in Potable Water ............................................................................................. 58

Government Solutions .......................................................................................................... 59Radioactive Metals .................................................................................................. 60

ILLUSTRATIONS:

CHAPTER 1 FIGURESFigure 1. World Copper Inventory Trends ......................................................................................... 6Figure 2. World Copper Recovery from All Sources and Percent Copper from Scrap1970-2008 .... 7Figure 3. World Consumption of Copper of Direct Melt and Refined Scrap, by Region1970-2008 .. 8Figure 4. Trade in Copper and Copper Alloy Scrap, by World Region1989-2006 .......................... 10Figure 5. U.S. Total Copper Consumption, Including All Scrap1965-2008 ..................................... 13Figure 6. Trends in U.S. Net Export and Consumption

of Copper in Copper-base Scrap1980-2008 ................................................................ 14Figure 7. U.S. Copper Alloy Ingot Production, by Ingot Group1984-2008 ...................................... 17Figure 8. Trends in U.S. Copper Smelter and Refinery Capacities ................................................ 21Figure 9. U.S. Copper and Copper Alloy Purchased Scrap Flow Chartfor 2007 ............................ 25

CHAPTER 2 FIGURES


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Figure 10. U.S. Copper and Copper Alloy Scrap Consumption, by General Alloy Group ................ 29Figure 11. U.S. and World Scrap Resource, Pool of Copper Materials in Use ................................. 34Figure 12. U.S. Copper Resource for Old Scrap, Pool of Copper Materials in Use1939-2008 ........ 35Figure 13. Cumulative Old Scrap Copper, In the United States1959-2008 ...................................... 37

Figure 14. U.S. Industrial Copper Consumption Trends and Responseto Major Historical Events ........................................................................................... 88

TABLES:

CHAPTER 1 TABLESTable 1. LME, COMEX and U. S. Refined, Scrap and Ingot Prices ................................................ 61Table 2. World Copper Consumption. Direct Melt and Refined Scrap, and Refined Copper

A. World Copper Recovery from All Sources .................................................................. 62B. World Production of Refined Copper by Source ......................................................... 63C. World Consumption of Copper in Direct Melt Scrap .................................................. 64D. World Recovery of Copper from Copper-base Scrap, by Country and Area ............. 65

Table 3. World Copper and Copper Alloy Scrap Exports ................................................................ 66Table 4. World Copper and Copper Alloy Scrap Imports ............................................................... 67Table 5. World Production of Copper and Copper Alloy Ingots ....................................................... 68Table 5A. World Production of Copper and Copper Alloy Foundry Products .................................... 69Table 5B. Copper, Copper Alloy and Master Alloy Ingot Imports ...................................................... 70Table 5C. Copper, Copper Alloy and Master Alloy Ingot Exports ...................................................... 70Table 6. U.S. and World Refined Copper Consumption and U.S. Copper From Scrap .................. 71Table 6A. U.S. Cumulative Copper Calculations ............................................................................... 73Table 6B. Estimation of the Recycling Input Ratio (RIR) and Recovery Ratio

for the United States ..................................................................................................... 74Table 7. U.S. Production of Refined Copper, by Source ................................................................. 75Table 8. U.S. Exports and Imports of Copper and Copper Alloy Scrap ........................................... 76Table 8A. U.S. Domestic Exports of Copper and Copper Alloy Scrap, by type ................................. 76Table 9. U.S. Trade and Consumption of Copper Ash and Residues

and Zinc Products from Scrap.. ..................................................................................... 77Table 10. Ingots, Foundry Castings, Brass- and Wire-Mill Semis and Copper Sulfate

Production in the United States ..................................................................................... 78Table 11. Standard Designations for Cast Copper Alloys ................................................................. 78Table 12. Copper Recovered from Scrap in the United States and Form of Recovery ..................... 79Table 13. List of U.S. Primary Brass and Tube Mills ......................................................................... 80Table 14. List of U.S. Ingot makers, Secondary Smelters and Refiners, and Secondary

Chemical and Hydrometallurgical Plants ....................................................................... 81

CHAPTER 2 TABLESTable 15. Copper and Copper Alloy Scrap Types, Showing General Range in Compositions ......... 82Table 16. Principal U.S. Scrap Source Materials for Copper ............................................................ 82Table 17A. U.S. Copper Scrap and Copper Alloy Consumption .......................................................... 83Table 17B. U.S. Copper Scrap and Copper Alloy Consumption .......................................................... 84Table 18. Estimated Secondary By-products, by Plant-Type Sector ................................................. 85

CHAPTER 3 TABLESTable 19. Particulate Emission Factors for Furnaces Used in Secondary Copper Smelting

and Alloying Process ..................................................................................................... 90

APPENDIX A Historical Review of U.S. Export Controls on Copper-base Scrap ........................................ 87APPENDIX B Superfund Sites ..................................................................................................................... 91LIST OF REFERENCES .................................................................................................................................. 94


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EXECUTIVE SUMMARY

Effects of the looming industrial recession becameobvious during 2008. Copper prices were highthroughout the early part of the year, but by latesummer, dropped precipitously as a result of thegrowing International financial crises and worldwideindustrial contraction. This was a distinct change fromthe higher prices that were prompted by the supplyshortages of the previous four years. Following thecopper oversupply years of 1999 through 2003, theworld economic recovery was well underway in 2004and copper prices reached a high of about $1.50 perpound on the LME by years end. World copper pricescontinued to rise through 2008, with the LME spotcopper price, at several points, exceeding $4.00 perpound. The average LME grade A price for 2006, and2007 averaged about $3.05 and $3.23 per pound,respectively. But by December 2008, the price washovering around $1.35 per pound. Even so, theaverage price for 2008 was $3.30. With such loftyprices, scrap supplies for U.S. consumers were tightfor most grades collected, owing to increasingly higherexports. Since 1999, U.S. copper scrap exportsexperienced extraordinary growth to the Far Easterncountries, and China in particular.

World copper was in short supply through most of theperiod, 2005 through 2008. Shortages persisteddespite efforts by the major copper producers to bringmines back on stream, or start new mines, toincrease production. Labor strikes, lower ore gradesand other production problems seemed to plague theindustry. The supply/demand deficit for 2005 was

73,000 tons according to the International CopperStudy Group (ICSG). At the end of December 2006,total world copper inventories, were 1.1 million tonsand were about 23% less than that required to supplythe world for one month. Owing to the release ofunknown, but apparently significant, quantities ofcopper from the Chinese strategic stockpile, worldcopper supplies were partially ameliorated during thelatter part of 2006, and prices began to soften.

By yearend 2007, visible world copper stocks wereestimated by the ICSG to be around 1.4 million tons,up by about 667,000 tons from that of yearend 2005.

These inventories represented about 3.7 weeks ofaverage world copper consumption, and near the four-week level for world consumption that by many isconsidered to be normal, or in balance. Inventorieswere drawn down during early 2008 to around 1.26million tons. A delicate balance between supply anddemand persisted through mid-2008. However, theprice of copper started to collapse in September, 2008as world economies began to contract.

In August and September. 2008, a series of financialrescue packages by the U.S. governmenthighlighted the credit crises that would abruptly stifleindustry throughout the world. As a result, manycopper producers around the world took steps in late2008 to curtail excess production in an effort toprevent a disastrous over stocking of the metal whilethe world economies recovered. On the major stock

exchanges, the share values for the copper miningcompanies also plummeted by up to 80%, within a fewshort weeks.

By yearend 2008, although most large copperconsuming countries had severely curtailed business,copper inventories had still not reached the high pointof 2002 when the accumulated world copperinventories represented well over two months ofindustry supply at average rates of consumption. In anattempt to prevent a similar huge buildup ofoversupply, most major copper mining companiestook stern measures to cut back on production in late

November and early December 2008. Inventories onthe LME reached 340,000 tons in December, nearlydouble that of a few months earlier, and the mostsince February 2004.

Between 1998 and 2003, U.S. secondary copper-basescrap collection and processing capacity had beenseverely impacted by surplus world copperproduction, higher environmental compliance costsand escalating scrap exports to competing nations.Lower copper prices and higher recovery costs from1998 through 2003 created a cost squeeze thatcaused the closing of all U.S. secondary smelters andassociated electrolytic refineries. Of the foursecondary smelting and two electrolytic refining firmsoperating in 1996, none remained after 2001. Firerefining, which requires a better grade of scrap, heldits own through much of the period, but was alsoaffected by occasional cutbacks and closings. Plantclosings also occurred in the ingot-making andfoundry sectors of the industry. Without a basicdomestic secondary-processing infrastructure, morevaluable metals likely will reach the landfill as themost reasonable remaining choice. Export is alwayspossible for the higher grades of scrap, but the lower-grade copper by-products, which might be tradeddomestically, could become less marketable.

The significant competition by foreign nations forquality domestic scrap over the past 10 yearsnegatively impacted U.S. scrap dealers, scrapprocessors and users alike. A temporary drop in U.S.scrap exports in 2005 probably was partially owing tothe threat from a short supply petition made to theU.S. Government in early 2004 as well as a move bythe Chinese Government to tighten control on certainmetal imports. Although the U.S. Government turneddown the industry petition for control and monitoring of


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scrap exports, the U.S. scrap availability situation hadimproved by years end 2004 for a short period. SomeU.S. wire choppers reported significant pickup inactivity and a return to profitability. However, by 2006,U.S. scrap exports continued at a high pace through2007 and most of 2008, and were more than doublethe export rate of 1999.

U.S. scrap processors and their U.S. customers(brass mills, ingot makers and foundries) remained ata critical crossroad through 2008. Scrap suppliesthrough 2006 and much of 2008 remained tight andsome qualities were difficult to obtain. Price spreadsimproved, but owing to higher processing costs (labor,environmental, energy and taxes), and highcompetitive scrap exports, domestic marketsremained difficult. Tight scrap supplies were drivingprices over much of this period. China, South Koreaand India continued to be large importers of U.S. andEuropean scrap.

Refined copper consumption in the United Statesincreased about 10.4% between 1994 and 2000 tonearly 3 million tons. However, by 2003, U.S. refinedconsumption decreased to around 2.3 million tons,and then recovered modestly to around 2.4 milliontons in 2004. Copper consumption was down again tonearly 2.1 million tons in 2006 and 2007. It is alsoworth noting that in 2006, the United States importedrecord amounts of refined copper, reaching nearly 1.1million tons. This was a continuing sign of a growingand higher U.S. import reliance (nearly 40% in 2006,compared with only 2% in 1993) for copper.

Semifabricate (tube, sheet, strip, rod etc) productionat the copper consumers suffered as facilities closedsince 2000. U.S. production of semifabricates atbrass and tube mills decreased from 3.9 million tonsin 1999 to around 2.9 million tons in 2007. Two mainfactors contributed to tubing company demise:increasing use of plastic pipes for constructionapplications and increased imports of copper andaluminum tubing from China and other countries.Further evidence of the industry contraction isillustrated by the fact that an estimated 16 brass millplants and facilities also have closed in the UnitedStates over this period. This occurred despite the factthat the United States was undergoing a tremendoushousing boom and supporting a foreign war, bothlarge consumers of copper products.

Over the period 1996-2007, world refined copperconsumption increased by over 41% to more than17.7 million tons by 2007, an average ofapproximately 3.7% per year. Despite highersecondary exports and lower copper consumption, theUnited States remained a leading consumer of copperfrom copper-based scrap with 13% of the worlds totalin 2007. In 2007, the United States consumed about 3

million tons of copper from all scrap and primarysources, including about 920,000 tons from refinedand direct melt scrap.

While copper recovered from new, manufacturingscrap sources has been increasing in the UnitedStates, copper recovered and consumed by industryfrom old , used product scrap sources has been

decreasing. Copper recovered, and consumed by theU.S. industry from old scrap was as high as 613,000tons in 1980, but was only 161,000 tons in 2007.However, if net scrap exports (632,000 tons in 2007)are classified as old scrap and are included in anestimate for all old scrap recovered, the potentialamount of copper in old scrap collected in 2007 wasabout 905,899 tons (old scrap plus net exports). Thismuch higher value implies that the rate of old scrapcopper recovered from the end-use reservoir has notreally diminished, as otherwise might be indicated byreported U.S. scrap consumption data.

World trade (imports) in copper-base scrap increasedby about 340% between 1989 and 2006, largely inresponse to the increased industrial growth in the FarEast and Europe. Asia and Middle Eastern countriesreceived about 76% of world copper scrap imports in2005 and 2006. The United States continued to be thelargest exporter of copper scrap in the world,exporting 18% of the worlds total copper-base scrapexports in 2007. Exports of scrap from the UnitedStates were over 900,000 tons per year for both2007and 2008. China used an estimated 33% of worldcopper recovered from scrap in 2007, and hasbecome the largest copper scrap-consuming nation inthe world.

In 2005, Chinas economy expanded by 9.9% overthat of 2004., and this rapid growth continued throughearly 2008. To support its rapidly expandingeconomy, copper and copper alloy scrap imports byChina reached a record peak of 5.8 million tons in2008. China was the largest importer of copper-basescrap in 2007, with an estimated 68% of world copperscrap imports of 8.1 million tons.

In response to environmental concerns, Chinaimplemented import controls for scrapped electronicsand the lower grades of copper scrap in 2002. Evenso, China reduced its import duty on copper scrap in2006 to promote the development of the metalrecycling industry and to help shortages in thenonferrous metals sector, in general. China, amember of the World Trade Organization (WTO), hasbeen accused by the European scrap processors ofassisting its domestic companies through taxsubsidies, credit facilities and other protectionistbenefits that cause harm to the European scrap metalrecycling industry.


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Trade restraints on scrap, such as import quotas,export licenses, price controls and other mechanismshave been used many times over the past 30 to 40years in the United States and other countries. Thesehave been applied mainly during times of nationalemergency and supply shortage. The entire U.S.secondary copper processing industry was treated asa critical and strategic industry during these tight

supply periods, such as during WWII and the VietnamWar. However, the United States has had no traderestrictions on copper-base scrap since 1970. All ofthe remaining copper in the National DefenseStockpile was sold in 1993. In April 7, 2004, the U.S.copper consuming industries filed a short supplypetition under the Export Administration Act,requesting imposition of monitors and controls on theexport of copper-based scrap. The U.S. Governmentturned down the petition later in the year.

The U.S. secondary copper processing industrycurrently consists of 5 fire-refiners, 25 ingot makers,

30 primary brass mills, 14 wire-rod mills and about500 foundries, chemical plants and othermanufacturers. Wire rod mills do not consume muchscrap directly. Most of the chemical plants arehydrometallurgical plants that have createdbusinesses based on using secondary by-productsproduced by other metal production and metalfinishing. Many copper chemicals, such as cupricoxide, copper sulfate and others are produced fromscrap in the United States. Some chemicals are alsoproduced from the fluid streams of primary copperrefiners. While one chemical plant closed in Texasduring 2005, another opened in Arizona, associatedwith a primary producer. Two ingot makers haveclosed since 2003, as have an estimated 16 brassand tube mills.

The EU-15 as a group of countries is the largest ingot-producing entity in the world. However, the UnitedStates (28%), followed by Italy, Japan, and Germany,is the worlds leading ingot-making country, providingthe domestic foundry and brass mill industries withspecial alloys for casting and milling. Ingot-making, inparticular, is a very scrap intensive industry, usingmostly scrap as its raw material. Even so, the brassmill industry (77.4% of 2007 copper-base scrapconsumption) consumes most of the copper-basescrap recycled in the United States. Some coppertube and wire rod mills have had secondary smeltersor refineries associated with them because of theirrequirement for high-purity copper. Unfortunately,most of these secondary smelting and refiningfacilities have closed, owing to the recent pooreconomic environment for processing scrap and theeasy availability of low-priced primary refined copper.

In 2007, recycled copper consumed in the UnitedStates was derived 84% from purchased new copper-

base scrap generated in the process of manufactureand 16% from old scrap derived from used products.According to the U.S. Geological Survey, purchasednew copper-base scrap yielded about 845,000 tons ofcontained copper in 2007, 79% of which wasconsumed at primary brass, tube, and wire rod mills.A manufacturer may generate up to 60% scrap in theform of slippings, trimmings, stampings, borings and

turnings during the manufacture of finished articles.This new, or mill-return, scrap is readily used by theindustry in making new semifabricated products. Asecondary material becomes purchased scrap whenit is traded or otherwise sent to market. Home scrap,or runaround scrap, is used in-house, not marketedand not counted in consumption statistics.

In addition to the better known classes of purchasedscrap, there is a smaller group of lower-grade, copper-base scrap known generally as low-grade ashes and residues , or as secondary by-products . By currentdefinition, these materials are comprised of copper-

bearing ashes, residues, drosses, skimmings, dusts,slags and other materials containing less than 65%copper, and are derived as by-products of othercopper-base metal processing. According to the U.S.Geological Survey, which has long tracked thepurchased scrap market for this material, only 18,600tons of low-grade ashes and residues was purchasedand consumed domestically for its metal content in2007. This is down considerably from the 300,000tons to 500,000 tons that was marketed in the 1970s.The downturn in domestic consumption of thismaterial coincides with cutbacks in the domesticsmelter industry, the decrease in use of reverberatoryfurnaces by the copper industry, and the closure ofsecondary smelters and ingot makers.

Though most firms prefer to ship high-grade slags andskimmings (up to 65% copper) to other domestic orforeign firms for further processing, about 28% of theslag and skimming by-products produced areprocessed in the plant of origin. In addition, picklingsolutions may also be reprocessed in house toproduce copper cathode. A significant proportion ofthese higher-grade products is exported to Canada orMexico as a result of decreased U.S. processingcapacity.

In addition to the copper-bearing ashes and residues,the copper-base secondary industry also producessignificant quantities of zinc oxide as a by-product ofits metal processing. The USGS estimates that about30% of the worlds zinc is produced from secondarymaterials, some of which is from the flue dustcollected during copper alloy processing. While someof the production is suitable for direct use as animalfeed and agricultural products, most is sent to zincsmelters and processors for treatment and zincrecovery. Only the poorest grades are landfilled.


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Spent furnace linings used in pyrometallurgical copperand copper alloy processing are also by-products thatsometimes have further value. The type of lining usedvaries from chrome-magnesite brick to various typesof ceramic-like materials that are applied like cement.While some spent linings are recycled for their metalcontent or used for concrete and other constructionmaterial, some end up in the landfill. Spent furnace

brick containing appreciable cadmium or lead areshipped as hazardous material. All products sent tolandfill must pass the USEPA hazardous material test,the Toxicity Characteristic Leaching Procedure(TCLP).

The TCLP has been challenged in court in recentyears for its inherent difficulties in predicting alldisposal situations. The TCLP was not intended to berepresentative of in situ field conditions, but rather of ageneric municipal solid waste (MSW) landfill worst-case scenario. In February 1999, the ScienceAdvisory Boards Environmental Engineering

Committee (EEC) called for the need to review andimprove EPAs current leachability testing procedure.The U.S. mining industry and others have alsochallenged the applicability of the TCLP based on thephysical and chemical differences between municipalwaste sites and those used for large volume minewastes, among other uses.

Many problems have been derived from theapplication of CERCLA (the Superfund Law), passedin 1980, and RCRA (Resource Conservation andRecovery Act), passed in 1976. Most problems stemfrom the reporting, permitting, and other paperworkrequirements, as well as from the legal liabilitiesstemming from application of these laws. Forexample, liability concerns have been enormousbarriers to brownfield cleanup technologies. Abrownfield is a site, or portion thereof, that has actualor perceived contamination and an active potential forredevelopment or reuse. Because financial institutionscan be liable for cleanup costs when they acquire theproperties through default, they are unwilling toprovide loans for development. Problems alsoemanate from the potential responsible party (PRP)aspects of CERCLA. The potential here is to benamed liable for expensive cleanup solely becauseyou may have done business with a firm named as aSuperfund site. This approach to Superfund financinghas caused businesses to think twice about shippingmaterials to certain firms.

In addition, restrictions on shipping products areincreasing. Once a product is classified as hazardousand/or is controlled as to market, handling andshipping, costs rise. Higher costs have resulted fromrulings that dictate how much can be stored in oneplace or another, what must be classified ashazardous, who may receive the material, and what

procedures must be followed through the entireproduction and marketing process. The permittingprocedures and handling restrictions have not onlyadded to the costs of shipping, but have also reducedthe potential for by-product sale to other processors.Further tightening of regulations throughreclassification of secondary products currently tradedwill result in higher costs and more products sent

directly to the landfill.

Those firms that can have opted to invest money inbecoming more internalized with increased in-housetreatment of products. Many have adopted uniquecost-saving devices and policies. Some also areinstituting formalized, self-policing managementsystems to improve their processes and products, viathe ISO 9000 and ISO 14000 standards. Some partsof the government are also taking a harder look at theregulations that affect the smooth marketing ofproducts and, in particular, the development ofbrownfield sites. Nevertheless, the current economic

situation continues to look more difficult for someparts of the secondary copper industry. This segmentof the economy seems to be laboring under significantstress, caused in part by changing and more stringentgovernment regulations.

Problems on the horizon include the safe collectionand processing of junked electronics equipment andthe potential for renewed recycling of radioactivemetal from dismantled U.S. nuclear plants. U.S. scraphandlers and processors have been adapting rapidlyto handle the increased recycling of electronics scrap.At the same time, however, adequate provision forfacilities to handle the relatively small amount ofradioactive copper scrap expected from dismantlednuclear facilities remains a problem to be solved in thefuture. More recently, additional charges to be leviedthrough the carbon capture program associated withthe so-called Global Warming efforts by the U.S.Government could deal a severe blow to the industry.

How much copper has been recovered for reuse inthe United States over time? Recent calculationsindicate that since 1864, more than 66% of all primarycopper consumed in the United States has beenreturned and reused as scrap. Based on reported U.S.data, cumulative primary refined copper consumed inthe United States since 1864 amounted to 125.5million tons by 2008. From this source, a cumulative43.7million tons ( 52%) of copper from old end-usescrap has been returned for consumption by theindustry through 2008. This leaves an estimated 48%remaining in use or recirculating as newmanufacturing scrap. The latter percentage includes avery small amount known to have been dissipatedthrough use as copper chemicals. It is not known howmuch may have been irretrievably dispensed with orthrown away, but it is suspected that this is small and


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CHAPTER 1: Industry Perspectives

Global Industry Perspective

World Copper Consumption and Production .Copper ranks third in the world consumption ofmetals, after iron and aluminum. According to theInternational Copper Study Group (ICSG), refinedcopper consumption was 17.7 million tons in 2007, upfrom 16.7 million tons achieved in 2005. Estimatesbased on 8 months data for 2008 indicated thatcopper usage continued at a higher rate through thefirst half of the year. However, following the abruptfinancial adjustments that rippled through the worldbeginning in August, industrial copper consumptionwas curtailed significantly by yearend. According toearly data by the ICSG, copper usage had increasedby 2.5% for the first 8 months of 2008.

The major refined copper consuming nations of theworld in 2007, were: China with 4.6 million tons (26%),United States 2.1 million tons (12%), Japan, 1.25million tons (7%), Germany, 1.4 million tons (7.8%)and South Korea, 820,000 tons (4.6%). China did notshow much consumption growth in 2006, comparedwith 2005 in its official statistics. Many observerssuspected that industrial Chinese copper consumptionin 2006 was largely fed by withdrawals from thegovernment official stockpile, for which no figureswere available to the public. Copper usage in Chinafor 2007 was 26% higher than that of 2006. Prior tothe yearend financial crises, the first 7 months ofChinese copper usage in 2008 was 12% higher than

the comparable 2007 period, according to the ICSG,and seemed to be on track for another record year.

Chinas refined production was 3.5 million tons in2007.up about 35% from 2.6 million tons of copperproduced in 2005. While refined production inNovember 2008 fell by 2.3%, Chinas National Bureauof Statistics (NBS) reported refined copper output was

up by 9.6% for the first 11 months of 2008. With thisrecord production, China maintained a position ofleading refined copper producer, exceeding that ofChile. However, about 33% of Chinas refinedproduction is from scrap, whereas all of Chiles refinedproduction is from primary sources. China has alsobecome the leading world importer of copperconcentrates and scrap used in domestic processingplants.

In this report, 2008 production and trade estimates onthe data tables were made for the convenience of theinterested reader. These current year estimates, for

the most part, were based on 8 to 10 months ofreported data. The previous (2007) years estimatesare revised to a provisional status based on publisheddata now available by the reporting agencies. Inrecent years, mineral and secondary industries datafrom the critical Minerals Information group of the U.S.Geological Survey has been severely impacted by alack of government funding and contraction ofavailable staff. As a consequence, public datadelivery has suffered. Not many in the public realizethat this organization is the backbone to U.S. scrapdata collection, which it has been collecting for overover 100 years. The minerals information community

Figure 1. World Copper Inventory TrendsCopper Consumption Rates and Prices


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would otherwise be much more concerned. As aconsequence, the data presented in this reportcontains many more estimates than would otherwisebe the case at this point in time.Following several years of soft demand and highinventories on the LME , Comex and SHME, copperinventories reached all time lows by late 2004 (seetrends on Figure 1 ). At the end of 2005, world

inventories, according to the ICSG were only 851,000tons and about 35% less than that required for onemonths world consumption. Despite efforts by themajor copper producers to bring mines back onstream during 2005 and to increase production,shortages persisted through much of 2006-2008.Copper prices exhibited marked increases, contrary tomany analysts predictions. Labor strikes, lower oregrades and other production problems seemed toplague the industry. Production and consumptionappeared to be more in balance by year-end 2006,and inventories decreased slightly through mid- 2008.Except for the last 4 months of the year, prices

remained mostly above $3 per pound throughout2008, averaging about $3.23 for the year. By yearendDecember 2008, however, the copper price wasaround 1.35 per pound. LME inventories reached342,000 tons at yearend.

As a result of the more than adequate world supply ofcopper (see Table 1 ) world copper prices steadilydecreased 1995 through 2002. During this period,copper prices reached low levels not seen since the

recession years of the early 1980's. Since lower pricestend to prompt a decrease in the supply of copperscrap, the use of copper scrap as a component ofworld refined copper also decreased from 16% in1996 to about 12% in 2002. World production ofrefined copper from scrap increased along with thehigher prices that dominated the period 2004-2008.According to the ICSG, refined copper from scrap

comprised about 15% of total world refined copperproduction 2004 through 2008.

A reasonable spread in price also must be presentbetween the current refined copper price and that forpurchased scrap in order for processing to beprofitable. The price spreads between No. 2 scrap andrefined copper are lower or higher in coincidence tothe decreasing or increasing refined copper price inrecent years . For example, the price spread in theUnited States was as high as 32 cents in 1995, butreached less than one-half that amount during 2001and 2003. The price spread for these years was lower

than the 17-18 cent spread experienced during therecession years of 1982-1984. The price spreadsincreased again between 2004 to 2007 in tandem withthe higher copper price. With increasingly stringentenvironmental regulations and requirements, the coststo process scrap at all levels, from low-grade scrap topure metal scrap have escalated. The drastic costsqueeze during the poor pricing period (1998-2002)prompted U.S. secondary processors to rethinkbusiness methods and in fact, some opted to get out

Figure 2: World Copper Recovery from All Sources 1/ And Percent Copper from Scrap, 1975-2008

1/ Includes copper in primary and secondary refined production and estimates for direct melt scrap consumption.Data Sources: ICSG and USGS reports. See Table 2A, this report.

1 9 7 5

1 9 7 6

1 9 7 7

1 9 7 8

1 9 7 9

1 9 8 0

1 9 8 1

1 9 8 2

1 9 8 3

1 9 8 4

1 9 8 5

1 9 8 6

1 9 8 7

1 9 8 8

1 9 8 9

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

0

5

10

15

20

25

30

35

40

45

50Percent Scrap

0

2

4

6

8

10

12

14

16

18

20

22Million Metric Tons

W. Europe Africa Asia The Americas Oceania % Scrap

ASIA

WESTERN EUROPE

THE AMERICAS

PERCENTAGE SCRAP


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of the business. It is encouraging to note that theestimated average price spreads were 26.6 cents in2004 , more than 37 cents in 2005, 55 cents in 2006,and as high as 46 cents in 2007.

The producers price used in calculating the spreadsadds an extra 4 cents to 5 cents per pound forshipping and insurance. This is the delivered price. If

the COMEX price is used for the comparisons, thespreads would be more narrow. Thus the 26.6 centper pound average spread for 2004 could also beinterpreted as 21 cents per pound based on theaverage COMEX refined copper price for the year.Refer to the scrap and refined prices shown in Table1 for a complete series and comparisons. During2008, variability in scrap prices were generallycredited to Chinese buying and lower U.S. scrapgeneration, and not to increased domestic demand.

World copper recovered from all forms of scrap in2007 (refined and direct melt, Table 2D ) was about

7.0 million tons, up from 6.2 million tons in 2004. In aword of caution, the actual amount of copper fromdirect melt scrap may be underestimated, since thesedata (with a only a few exceptions) are based largelyon known (and estimated) semifabricate production ina particular country. No amount of scrap that might beproperly classified as home scrap, or that is lost inthe production process, is added to the direct meltscrap presumed to be part of the end product. Thegeneral formula is comprised of total semifabricate

production less amount of refined copper consumed.The copper content of direct melt scrap is based onpercentages ranging between 75% and 90% of thetotal, dependent upon type of products produced (i.e.,brass mill or copper rod mill etc). The United Statesreports actual numbers for types of scrap consumed,but is unusual among nations reporting scrap data.The U.S. Geological Survey is currently the scrap data

collection and reporting agency for the U.S.Government. Prior to 1995, this was done by the U.S.Bureau of Mines for over 100 years. Funding andstaffing problems have plagued the MineralsInformation group since the transfer.

Copper recovered from all scrap, as a percent of totalworld copper produced, has ranged between the lowof 28% in 2003 to as high as 40% during 1995, asshown on Table 2A and in Figure 2 . The current rateof recovery (2006 and 2007) is estimated to be 33%and 32%, respectively. The percentage of scrap usedby the world, relative to primary copper, was

noticeably lower after 1996. This trend shows astriking parallel to a downward trend in prices over the1996-2003 period (see Table 1 ). This was also aperiod of higher primary copper production and/orsurplus supplies. Periods of low scrap recovery, suchas those in 1975-1978, 1983-1984, and again in 2001-2003, coincide with low copper prices and surpluscopper supplies. Scrap supplies also slowed in late2008 when copper prices dropped precipitously. Thesituation was expected to continue well into

Figure 3: World Consumption of Copper from Direct Melt andRefined Scrap, by Region, 1975-2008


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16/10110

prices, and a cutback of copper demand from China,U.S. copper scrap exports slowed to a trickle.Supplies to U.S. metal traders essentially dried upwhile the prices were trying to stabilize. Some dealerswere stuck suddenly with supplies for which they hadpaid much higher prices than the current buyingmarket.

In Europe, exports of copper scrap to the Far Eastalso increased dramatically over the same period(1999-2007), at a time when local availability in theEuropean Union (EU) was lower, creating problemsfor European refiners. Some in Europe, as well as inthe United States, felt that unfair customs regulations,as well as lower labor and environmental costs haveenabled the Asian countries to pay higher prices forscrap. Although the United States has increased itsdomestic processing of electronic scrap, U.S. exportof low-grade copper scrap derived from electronicproducts such as computers remained an issue ofconcern. Even though China was tightening its rules

for importing electronics scrap, other poor countriesmay still be willing to accept these materials.According to some reports (Recycling Today, Feb.2002), Pakistan had become a bigger market forelectronic scrap and used computers. Chinareportedly applied import restrictions on electronicscrap and in May 2002 instituted a substantial tariff onclass 7 scrap. This class includes lower grades ofcopper scrap such as unprocessed wire and die castalloyed parts. The tariff may have also been enactedto force the domestic smelting industry to use highergrades of scrap as a pollution reduction measure.

China continued to tighten regulations and began inNovember 2004 to ban all used television sets andother electronic scrap imports in a bid to clean up itsenvironment. China reportedly reduced the importduty on copper scrap in 2006 and 2007 to promotegrowth in the metal recycling industry and assist thenonferrous metal sector in its need for raw materials.China reduced the import tariff for copper scrap from

1.5% to 0% in mid-July 2007 (ISRI Friday Report, July20, 2007). In late 2007, China announced that itwould remove import duties on refined copper. The3% import tax for refined copper was cut on Jan. 1,2008 (12/28/07, www.recycleinme.com). In mid-November 2005, China also signed the first EastAsian trade agreement with Chile as an importantbilateral trading partner. Chile is the largest refinedcopper producer in the world.

To maintain adequate supply for the home market, theChinese Government applied strict controls on theexport of copper-based products. In November 2006,

the export tax rebate on copper products was cut to5% from 13% and the export tariff on copperconcentrates increased to 10%. Meanwhile, exporttariffs on copper scrap, blister copper and electrolytic(refined) copper were also raised. The ChineseGovernment levied an export tax on nonferrous scrapat 10% from June 1, 2007 (Recycling Today, 5/23/07).

Export controls on scrap (such as those imposed byRussia and Ukraine) have been commonly applied inmany nations in the world during periods of scarcesupply. Historically, copper base scrap has been a

Figure 4. Trade in Copper and Copper Alloy Scrapby World Region, 1989 and 2006

Source: International Copper Study Group

America 15%Asia & M.E. 24%

Europe 61%

Asia & M.E. 76%

Europe 21%

America 3%


Europe 52%

2%


Europe 46%

3%

1989 Imports1.7 million tons

2006 Imports7.5 million tons

1989 Exports1.6 million tons

2006 Exports5.2 million tons

Row Row

Figure 4. Trade in Copper and Copper Alloy Scrap by World Region, 1989 and 2006


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highly prized raw material, especially in those nationswith scarce natural raw material sources for copper.European scrap export controls during the 1980swere seen as affecting the U.S. copper industryunfairly. As a result, the U.S. Copper and BrassFabricators Council (CBFC), representing domesticbrass mills submitted a 301 petition concerning thetrade of copper and zinc scrap to the U.S. Trade

Representative on Nov. 14, 1988. The application wasnot successful in developing U.S. controls. Domesticsemifabricators asserted that European (EEC) andBrazilian brass mills had been able to maintainmaterials cost and product price advantages since themiddle 1970s, largely through export controls on theflow of copper and zinc scrap. However, in 1992, theEC terminated the export controls on copper andcopper alloy scrap. Several Asian nations and Russiahave maintained scrap market controls in recentyears. The Bureau of International Recycling (BIR), aEuropean recycling organization, recently assistedRomanian companies in opposing a Romanian

governmental decree to impose 20% to 30% exporttaxes on nonferrous and ferrous scrap.

In April 7, 2004, the CBFC and Non-Ferrous FoundersSociety filed a short supply petition under the ExportAdministration Act, requesting imposition of monitorsand controls on the export of copper-based scrap.ISRI and its members were opposed to the petition asthey did not want exports restricted. The CommerceDepartment issued its decision in August 2004 citingno need for controls or monitoring of copper-basedscrap exports. See Appendix A for a more completediscussion.

The voluminous paperwork requirement the Chinesegovernment implemented for the importation of scrapwas viewed as an impediment in early 2004. Somescrap recyclers and brokers labored to comply withexport regulations being put in place by the ChineseGovernments Administration of Quality SupervisionInspection and Quarantine (ASQIQ) (RecyclingToday, August 2004). The significant load ofpaperwork required had an initial deadline set at July1, 2004 in order to be registered or permitted to shipscrap to China. Not only was the informationrequirement voluminous, but some information suchas floor plans and other operational details of theexporting company, required to qualify for the CCCmark system, were objectionable. The suspicionexisted that the Chinese importers were determined tohelp themselves to efficient production facility knowhow.

Another problem with copper scrap exports to Chinarevolved around Chinas handling of its VAT (Value-added Tax). The VAT tax on copper waste and scrapwas 17% in 1999 ( www.chinavista.com) . The sametax applied to refined copper imports. Chinese copper

scrap importers and Chinese customs officials wereaccused of manipulating the VAT to the detriment ofU.S. industries. Chinese importers received a rebateon VAT and then further manipulated importdocuments to gain greater VAT refunds. Theseactions caused global copper scrap prices to risebecause Chinese importers could pay more for scrap,but still make a profit. U.S. manufacturers that use

scrap were faced with higher prices for raw materials,thus increasing their production costs. Finishedproducts from China were subsequently undersold inU.S. markets (US Info.State.Gov. 10/7/2003).

In December, 2008 (Recycling Today, Dec.2008),Chinas Nonferrous Metal Industry Association(CNMIA) announced that the government wasconsidering canceling the 17% VAT tax on scrapimports. The CNMIA hoped the move would helpcompanies cut costs as the economy slowed. Chinasindustrial output grew at the weakest pace in adecade during November 2008 and scrap imports

were down by 33% compared with March 2008.Copper scrap imports were 360,000 tons inNovember.

Pegging the yuan to the dollar was also reported as adeliberate strategy to support Chinese industry andboost exports. Chinas undervalued currency wasacting as an additional trade barrier to U.S. exportsand an unfair subsidy for all Chinese exports(Congressional-Executive Commission on China, Sept24, 2003). In September 2007, China Logistics News(China Economic Review) reported a huge back up ofcontainers filled with scrap, caused by a crackdownon importers trying to avoid complying with the newduties for scrap. Two months previously, Chinesecustoms officers launched a major offensive againstimporters, who had been trying to avoid complyingwith new duties. There had been a widespreadpractice among many Chinese importers of mixinglower content scrap with higher purity material toavoid paying higher taxes. Duties are applied to thecopper content, so a reduced copper content meanslower duty. Another problem area is mixed loads ofscrap where the high value copper is loaded in front ofthe container and lower grade scrap is loaded in back.

Some observers have used problems in Chinesetrade regulations to explain the tremendousdifferences between reported world statistics forcopper scrap imports and exports See Tables 3 and 4in this report for differences. Among importingcountries, the import statistics for China seem to bethe most suspect. Copper scrap imports are overreported because some other industrial waste hasbeen claimed at customs as copper or copper alloyscrap. Some believe this may be the result of thelower copper scrap import duty relative to otherindustrial wastes. Some traders may be trying to avoid


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the higher import duty by importing non-copperindustrial waste as copper scrap. Imports of scrappedelectrical domestic and office goods also may havebeen imported as copper scrap, since these havebeen prohibited since Aug. 15, 2002.

Ukraines parliament gave approval to a bill in late2006 that would lift the ban on exports of scrap

nonferrous metals. An export duty of 30 Euros permetric ton would apply the first year the bill is in effectand would be gradually reduced to 15 Euros permetric ton over the next 5 years. The duties wouldstart when Ukraine joined the World TradeOrganization. (Recycling Today, 11/30/06). Export taxes are not the only trade barrier that Ukrainemaintains. Ukraine does not allow the export of scrapmetal products unless exporters are properlyregistered with the Ministry of Economy and areissued an export license. Export registration fees alsoobstruct trade in scrap metals. Until recently, the feefor export licenses for ferrous and non-ferrous scrap

was five times higher than the ordinary customsclearance fee of 0.1 percent of the value of the exportcontract. Despite Ukraines pledge to reduce its highexport taxes in 2006, political divisions leading up tothe 2010 presidential election, coupled with thesubstantial influence of industry leaders, have slowedprogress towards trade liberalization and deregulation.In the face of its commitments to eliminate or reduceexport and import bans and tariffs across a widevariety of industries, and just days after Ukrainebecame a working member of the WTO, the Ukrainianparliament passed a major bill containing export andimport duties that were in direct violation of WTOagreements (Wiley Rein, 2008).

World Production and Trade in Copper Alloy Ingot.While copper and copper alloy ingot production andtrade are not large in volume compared with othercopper products; they form the foundation blocks forimportant specialty metal fabrication industries. Manynonferrous foundries, brass mills, steel mills and otherparts of the world's manufacturing industry aredependent on the special alloys produced by theseessential-processing plants. Because the ingotmakers and associated foundries of the world areheavily reliant on scrap, especially old scrap fromreturned manufactured and used products, it isimportant to put this industry in world perspective.

The United States is a world leading producer ofcopper and copper alloy ingots and foundry productsfrom scrap (see Tables 5A, B and C and Table 10 ).The United States produced 254,000 tons (23%) ofworld nonferrous foundry products in 2002 and207,000 tons in 2006. Italy (7.4%), Japan (8%) andGermany (7%) are also significant producers ofnonferrous foundry products. China (30%) has

increased foundry production significantly since 1999,producing more than 400,000 tons per year by 2005.

The same countries are significant copper-based alloyingot producers with the United States producing 28%of the total world ingot production. More than half ofthe worlds alloy ingot production, of around 440,000tons per year in 2005, is exported. According to the

ICSG Copper Bulletin, world ingot imports were299,000 tons and exports were 385,000 tons in 2007.During 2007, China (20%), Germany (16%), Italy(8.6%), Taiwan (4%), Canada (3.6%), and France(4.8%) were the largest importers of ingot. Since1999, China has increased its imports of ingots by afactor of 6 to around 82,000 tons in 2003 and 64,000in 2005. The United States also has almost doubledits ingot imports in the past two years to around10,000 tons. The United States (40,000 tons), Japan(33,000 tons), Germany (21,200 tons), the UnitedKingdom (18,400 tons), South Korea (17,700 tons),Spain (14,200 tons) and Hong Kong (8,800 tons) were

the leading exporters of ingot in 2007.Over the past 5 years, U.S. ingot exports werebetween 19,000 tons and 40,000 tons, reaching apeak in 2007. U.S. ingot imports decreased markedlyfrom about 23,000 tons per year in 1999 to around5,000 tons per year, but increased significantly since2005. In examining the ingot import data of Table 5B ,it can be seen that ingot imports have decreasedgenerally in every region of the world, with exceptionof the Middle East and Asia, which has tripled theamount of alloy ingot imports since 1999.

Domestic Industry Perspectives

Domestic uses for Copper . About 75% of the copperconsumed in the United States is for electrical andelectronic uses, finding widespread application inmost end use sectors of the economy. According tothe Copper Development Association (CDA), 6.735million pounds (3 million metric tons) of copper andcopper alloy mill products were shipped for domestic2007 end-use markets. The products were distributedin sectors as follows (electrical is distributed throughall end-use markets): Building Construction (49%),Electrical and Electronic Products (21%) IndustrialMachinery and Equipment (9%), TransportationEquipment (10%) and Consumer and GeneralProducts (11%). In 2005, copper mill production of7.660 million pounds was marginally higher than thelow point of 2003, but still much below the high pointof 9,379 million pounds for 1999. Though smaller intotal tonnage than the electrical and electronics usesof copper, the copper powder and chemical industriesalso provide important products. Copper and copperalloy powders are used for brake linings and bands,


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bushings, instruments, and filters in the automotiveand aerospace industries, for electrical and electronicapplications, for anti-fouling paints and coatings, andfor various chemical and medical purposes. Copperchemicals, principally copper sulfate and the cupricand cuprous oxides, are widely used as algaecidesfungicides, wood preservatives, copper plating,pigments, electronic applications and numerous

special applications.

U.S. Consumption of Copper . In the United States,copper derived from both primary (mined) andsecondary (recycled) sources is consumed atindustrial production plants. U.S. industry importreliance for copper in the last 14 years has increasedfrom less than 1% of domestic consumption in 1991 toover 43%, and 38% in 2005 and 2006, respectively.In 2006, a record level of refined copper, around 1.1million tons, was imported into the United States. Thiscompares with only 543,000 tons of refined imports asrecently as 1996. Copper derived from domestic

mines and as well as from domestic scrap sourceshas steadily decreased in recent years as imports ofrefined copper have increased. As copperconsumption at US plants dropped further in 2008,however, the rate of refined imports also declined.Based on 8 months data, US refined imports for 2008

were 704,000 tons, and still well above that of 1996.U.S. refined copper consumption for 2008 wasestimated to be a little over 2 million tons.

Recycled copper used to make semifabricatedproducts may be derived from (1) scrap that is firstrefined before use (refined scrap), or (2) from copperand copper alloy scrap that can be directly melted at

the time of use ( direct melt scrap ). Total refinedcopper, from both primary and secondary sources,consumed by the U.S. industrial sector in 2007 was2.14 million tons, according to the U.S. GeologicalSurvey (see Table 6 ), and still somewhat lower thanthe high point of 3 million tons in 2000. Copperconsumption for 2008 was estimated to be slightlylower. Of the total refined copper consumed in 2007only 42,100 tons (or 3%) was derived from scrapprocessed at a refinery (see Table 7 ). This is downconsiderably from 480,000 tons (25% of refinedconsumption) of copper from refined scrap in 1989. Inaddition, the United States industrial sector consumed

about 878,000 tons of copper in 2007 derived fromdirect melt, copper-based scrap (See Table 2C ). Totalcopper from scrap (refined plus direct melt copperbase scrap and from other than copper-base scrap)amounted to about 920,000 tons ( Table 2D ) in 2007.The range in annual average copper content for direct

Figure 5. U. S. Total Copper ConsumptionIncluding All Scrap, 1965 to 2008


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melt copper-based scrap in the United States hasbeen 83% to 85% of the gross weight over the past 10years, according to an analysis of data provided bythe U.S. Geological Survey.

Traditionally, scrap used in refining and smelting hasbeen made up mostly of old scrap, while thepurchased direct melt scrap used by brass mills is

mostly new , customer-returned scrap. The rate ofrecovery for old scrap copper in the United States isrelated to the variability in the copper price, thedomestic industry demand for this type of rawmaterial, competition from exporters, and theavailability of primary copper. The small amount ofU.S. secondary refined copper in 2007 was 68%derived from old scrap sources and 34% from newscrap sources, according to the U.S. Geologicalsurvey. The amount of secondary copper in U.S.refinery production was only 42,100 tons out of a total1.31 million tons refined copper ( Table 7 ). This wasdown considerably from around 480,000 tons of

refined copper derived from scrap in 1989. Thesignificant decrease observed since 2000 was theresult of the gradual and complete closure of all of thesecondary smelters in the United States. Refer also toFigure 8 for complete statistical details on smeltercapacity changes over this period.

Ingotmaking also uses large quantities of copper from"old " scrap (83% derived from old scrap in 2007).Copper from old scrap only made up 16% of totalcopper recovered from copper-base scrap in 2007.(USGS, 2007 Minerals Yearbook, table 7). Some

copper tube mills may use a higher proportion of oldscrap when purchased from dealers as good clean,No. 1 copper scrap. It is many times impossible for amill to determine whether the scrap is old or new inits origin after it has been chopped and processed byan intermediary.

U.S. scrap statistics shown in Table 6, represent

consumption, or copper scrap usage, as reported atindustrial plants, and thus, do not reflect the totalamount of material collected at scrap dealers andtraders. An increasing amount of U.S. scrap collectedhas been exported in recent years. Using anassumption that most internationally-traded copperscrap may be derived from used materials, theaddition of U.S. scrap exports to old scrap reported asconsumed by the industry will provide an estimate oftotal old scrap recovered in a particular year. This alsoassumes, of course, that most new scrap is returnedto the domestic mill of material origin and is not alsosold abroad.

Old scrap recycling and its contribution to U.S. totalcopper derived from scrap has fallen from 43% in1993 to 18% in 2007 (see Table 6). U.S. recovery andconsumption of old scrap was highest during WWII,the 1950s and 1960s, which were years of highcopper demand and high prices. Old scrap recoverywas also high during the Great Depression years,when mine production was severely curtailed. As apercent of total copper consumed, (see Figure 5 andTable 6 ) copper from scrap has declined from 49%since the early 1980s to around 30% in 2007. Despite

Figure 6. Trends in U.S. Net Exports and Consumptionof Copper in Scrap 1/ , 1980 - 2008


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the robust U.S economy over much of the period1994-2007, domestic use of copper from old scrapand refined from scrap, in particular, experienced asignificant decline (See Tables 6 and 7 ). Forexample, copper from old scrap recovery was as highas 613,000 tons in 1980, but was only about 161,000tons in 2007. Exacerbating the decline in collection,processing and consumption of old and low-grade

scrap in the United States has been the closure ofessential U.S. smelting and refining plant capacity. AllU.S. copper scrap smelting plants, most scrap refiningplants and some ingot makers have closed owing tothe higher costs associated with tight environmentalregulations, increased worker safety standards, andthe competitive pressures from increased export ofscrap.

Scrap is a necessary raw material in the U.S.manufacturing cycle. Not only does the U.S. industrygenerate many tons of copper-base scrap, but it alsoneeds and uses many thousands of tons each year

during the process of new manufacture. Customer-returned new scrap tends to be recirculated to theplant of domestic origin. In 2007, about 99% ofcopper-based scrap consumed at brass and wire rodmills was new scrap, according to the U.S. GeologicalSurvey (2007 Minerals Yearbook, table 11).The purchased scrap market gradually increased inthe United States through 1997, as shown in Table 6 and in Figure 6. This increase has been presumed toreflect the steadily increasing industrial base, fromwhich more customer return scrap is generated. Itwas also the result of the gradual decrease inprocessing capacity for old scrap. Since 1997,however, total scrap use has declined, coincidental tothe significant increase in U.S. scrap exports ( Table 3and Table 8 ). Lower copper prices, associated with anincrease in primary copper supplies until 2003 alsocontributed to decreased use of scrap (see Table 1). Though higher copper prices have been the casesince 2004, higher copper scrap exports continued toimpact domestic copper availability through 2007.

Even while the brass and wire mill sectors of the U.S.secondary-based industry were expanding capacity,mill consumption of scrap copper relative to primarycopper was decreasing. Until 1982, copper from allscrap sources had grown each year in the UnitedStates, as a percent of total copper consumed,varying between 7% (in 1906) to 50% (in 1950).However, from a peak of around 49% in the early1980s, the contribution of copper from scrap hasgradually been decreasing to around 30% in 2007(see Table 6 ). Copper prices have escalated since2003, but a coincidental increase in US industry scrapconsumption has not been evident. Instead, U.S.scrap exports have steadily increased over the period.

Copper consumption from scrap, as shown on Table6, does not include the significant amount of run-a- round or home scrap that is generated at every plant.Between 15% to 40% of raw material consumedremains in the production cycle of brass and wire millsand is recycled again and again. To include thismaterial in consumption statistics each year, however,would be to double count the material each time it

passed through the production process and wasscrapped. Yet, this material is available and forms anessential part of the semis production cycle.Unfortunately, few statistics are available to quantifyrun-a-round material.

U.S. Trade in copper and copper alloy scrap.Copper and copper alloy scrap of all types hassignificant intrinsic value for the manufacturingindustries of both the United States and the World.Copper base scrap, including lower-graded coppermaterials with by-product metal value, are allcommodity-like materials that are traded (bought and

sold) and used just like other raw materials. As aconsequence, recycled materials form a significantpart of the U.S. copper exports and imports. This hasbeen particularly significant in recent years since themanufacturing bases of the Asian countries havebeen growing and demanding more raw materials.The domestic market for scrap is still larger thanexports though exports have been growing at a fastrate. U.S. industry consumption of scrap hasdecreased from around 1.77 million tons in 1997 to alittle over 1 million tons in 2007 (see T able 17 ). U.S.net exports of scrap in 2008 were estimated to be690,000 tons, up from a net export of around 63,000tons in 1993, and 140,000 in 1997.

The United States is a significant exporter of copperand copper alloy scrap as shown on Tables 3 and 8,and has been the worlds largest exporter of copper-based scrap since 1999. The most significant U.S.scrap export destinations are in Western Europe andAsia. Although the amounts have been declining since1997, the United States also imports around 100,000tons per year of scrap. The most important U.S.import sources of copper and copper alloy scrap in2007 were Canada (31%) and Mexico (27%). Scrapexports generally have been increasing since theearly 1970s. Exports suddenly doubled between1999 and 2000 (see Table 8), and have remained wellover 500,000 tons annually since that time. Exportsset another record in 2007 at 906,000 tons. Lowerscrap imports and exports in 1996 through 1999, werethe result of the worldwide depressed copper prices,the strong U.S. dollar and a temporary setback inChinese imports during the early part of this period.The lower scrap price and stronger dollar alsocombined to make U.S. scrap scarce for domesticbuyers, as well as expensive for foreign buyers overthat short period of time. Since 1999, however,


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foreign buyers (principally China) have managed tooutstrip local mills in competition for scarce purchasedscrap.

In lieu of scrap, primary copper at bargain pricesbetween 1998 and 2003 provided a ready substitute inthe United States for those who could utilize it.However, owing to the types of furnaces used, size of

charge needed, and chemical requirements for certainalloys, this was not possible for all secondary metalusers, and the market became difficult for theseindustries. Those mills that were dependent upondirect melt alloy scrap were highly affected by theincreased U.S. exports.

The trend in U.S. net scrap exports appears as amirror image to the trend of copper recovered fromrefined scrap, as shown in Figure 6 . When refiningfrom scrap (largely old scrap) is high, net exports(exports less imports) are lower. Lower exports andhigher imports of scrap in the early 1980s were in part

owing to the stronger dollar of the period.Trade in low-grade, copper-containing ash andresidues has been recorded by the Bureau of theCensus under HTS 262030 since 1989, when theharmonized code was instituted in the United States.Prior to this nomenclature, the TSUS standards andnomenclatures were used. For exports, the TSUSnumber is 6030010 and for imports, it is TSUS6035040. Exports of "ashes and residues containingmainly copper" are reported in gross weight ofmaterial. The import data are in copper content, but itcan be extrapolated to gross weight for comparisonwith the USGS reports for consumption of low-copperashes and residues. Although the material maycontain up to 65% copper, an average copper contentof 35% was used in estimating the gross weight forexports and imports on Table 9 .

The major trading partners receiving ashes, residuesand slag from the United States for further processingare Belgium, Canada, Germany, Mexico, the UnitedKingdom and, more recently, China. Major importsources are the copper producers of Botswana, Chile,Mexico, Canada and Australia. Copper ashes andresidues exports increased from the early 1980's toreach 28,110 tons in 1995, decreased to as low as2,950 tons in 2002 and increased again to 20,000tons in 2004 and 2005. Copper ash and residueexports were 51,000 tons in 2006. Although importshad been decreasing (from 5,400 tons of coppercontent in 1988 to less than 700 tons in 2002 (seeTable 9 .), imports of ashes and residues have beenhigher since 2003, reaching 8,700 tons in 2007.

Because many of these materials are associated withthe brass and bronze making process, trade in zincdross, skimmings, ashes and residues are also shown

in Table 9 . As measured in zinc content of zinc ashand residues (HTS 26201960), exports reached apeak in 1992, but declined through 1999 to 4,500tons. Exports of zinc ash and residues increasedsignificantly since that time to reach 25,000 tons in2002, and 13,200 tons in 2004, but were down againto 4,220 tons in 2006. Zinc ash and residues importssteadily increased to around 24,300 tons, as

measured in contained zinc through 1998, but thendecreased to a range of between 14,000 and 17,000tons until 2005. Zinc ash and dross imports wereagain higher at 33,750 tons in 2006.

U.S. Export Controls on Scrap. During periods ofhigh military activity and/or difficult economicconditions, copper and copper-base scrap has been insuch tight demand and scarce supply that U.S. exportcontrols and other restrictions have been placed on itsuse. Tight supply periods occurred in the 1960's andearly 1970's, occasioned not only by requirements ofthe Vietnam War, but also by the effects of long

copper mine labor strikes during the late 1960s. Tocompensate for the severe shortages, more than 1million tons of copper from the National DefenseStockpile were released. In addition, during the early1970s, price controls were implemented. A briefreview of the historical events surrounding the use ofexport and price controls relative to the copper marketand the need for copper scrap is instructive. Thereader may refer to Appendix A for a more detailedaccounting of events prompting the need for exportcontrols. Given the propensity for military efforts touse large amounts of copper and its alloys, as well asto cut off major sources for copper around the world attimes, it is highly possible that export controls and thepressure for increased use of secondary copper canoccur again. All of the remaining copper in theNational Defense Stockpile was sold in 1993.

Products and by-products from Scrap

Wrought copper and copper alloys. The making ofbrass and bronze wrought metal alloys by brass millsaccounts for the largest share of copper recovery fromscrap. Wrought copper and copper alloys areproduced from purchased scrap, home scrap, refinedcopper, and other metal alloying additives. Thesealloys are fabricated into products such as sheets,tubes, rods and pipes. Wire rod mills producecontinuous cast, pure copper rod for making wire thatis drawn down to various types of coated anduncoated wire. Because of the stringentrequirements for making copper wire, wire rod millsuse mostly refined copper in making rod. The smallamount of scrap that is used by wire rod mills mustfirst be refined. Only one wire rod mill in the UnitedStates has a continuous system for fire refining,


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melting and rod casting from scrap. This mill uses thecompany's own customer-returned scrap from itswholly-owned wire mills in the fire-refining plant.

For 2007, the combined semifabricate production ofbrass and wire mills amounted to 2.95 million tons ofcopper and copper alloy products. ( Table 10 ). Thiswas somewhat lower compared with 3.2 million tons

of semifabricate products produced in 2005 ( Table10 ), and considerably lower than the peak of 3.9million tons reached in 1999-2000. The current lowerproduction rate is a continuation of the U.S. industrialretraction that has been experienced since 2000.About 16 brass and tube mills have closed in theUnited States since 2000 (see Table 13A). Two mainfactors contributed to tubing company demise:increasing use of plastic pipes for constructionapplications and increased imports of copper andaluminum tubing from China and other countries.

U.S. copper consumption statistics, as shown in Table

6 , are reported from brass and wire mill activity. Thesestatistics do not represent the entire U.S. populationsconsumption of copper. The statistics for the domesticpopulation would include copper contained in finishedand semifabricate imported goods. To determine acomplete U.S. societal copper consumption estimate,copper in imported finished goods also should beconsidered. Items such as copper in imported cars,refrigerators and other copper- containing goodswould be included. These statistics would be difficultto estimate, and such an exercise is beyond the scope

of this paper. Judging by the volumes of productsscrapped, however, it is suspected that the U.S.society remains the largest consumer of copper in theworld, regardless of where it originated or how it wasused.

Brass and Bronze Ingots. According to the U. S.Geological Survey, ingot production (including master

alloys) in the United States was about 128,000 tons(see Table 10 ) in both 2005 and 2006. Ingotproduction has been less than 200,000 tons in theUnited States over the past 10 years. This is downconsiderably from 300,000 tons to 380,000 tonsproduced in the 1960s and 1970s. U.S. ingot exportshave increased significantly in recent years to around45,000 tons in 2008 (see Table 8C ). U.S. ingotimports also increased to around 9,000 tons in 2008.Ingot making was a critical U.S. industry during WorldWar II, comprising a basic support for the essentialbrass mill and foundry production needed for the wareffort. This was so much the case, the Defense

Production Act required that, among all otherGovernment copper surveys, only the ingot maker,foundry and brass mill data surveys were mandatoryunder penalty of law. Special alloys and the specialcastings, fittings and parts made for military uses aredependent upon domestic production fromingotmakers and foundries.

Ingot makers produce a wide range of cast copperalloys for the nonferrous foundries. Ingots weigh about30 pounds each when cast, being of a small enough

Figure 7: U.S. Copper Alloy Ingot ProductionBy Ingot Group, 1984-2008

Source: U.S. Bureau of Mines and Geologi cal Survey Mineral Yearbooks

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20070

50

100

150

200

250Thousand Metric Tons, Gross Weight

Tin bronzes Leaded red/semired High-Pb Tin Bronzes Yellow brass Mn & Al Bronzes

Hardners, Misc. Nickel Silver Silicon bronze/brass


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size to suit foundry furnaces. Production trends forseveral broad ingot groups are shown on Table 10 .The most important of these are the red brass,bronze, and yellow brass groups. Figure 7 clearlyshows the gradual decline in U.S. ingot productionsince the middle 1980's with another sharp drop since2000. The leaded and semi-leaded red brass and thetin bronze categories of ingot seem to show the most

volume decrease since the late 1980s. A decrease inhardeners and master alloys seems to have occurredsince 2000. The general range in ingot compositionsare shown on Table 11. There are actually hundredsof ingot metal compositions designed for specialtasks. The groups shown in Table 10 are verygeneral.

Individual grades of copper and copper alloys havebeen designated in the past by a three-digit numberseries developed by the industry. More recently,however, this series has been incorporated into theUnified Numbering System (UNS) for metals and

materials developed by the American Society forTesting and Materials (ASTM) and the Society ofAutomotive Engineers (SAE). This system designateseach alloy by 5 digits preceded by the letter C. TheUNS system is administered by the CopperDevelopment Association Inc.(CDA). There are about370 types of copper and copper alloys divided into thebroad categories of wrought and cast metals. Withinthese two categories, the metals are furthersubdivided into classes as follows:

Coppers: Metals containing at least 99.3% copper.There are 44 numbered coppers, including oxygen-free, tough-pitch, and deoxidized varieties.

High-copper alloys : Copper content of cast alloys isat least 94%; copper content of wrought alloys is 96%to 99.3%. This class includes the cadmium, beryllium,and chromium copper alloys.

Brasses: Copper alloys containing zinc as theprincipal alloying element. There are 3 families ofwrought brasses and 5 families of cast brasses.EnviroBrass I, II and III were recently introduced in1999 as lead-free alternatives to the leaded-redbrasses used in plumbing. These lead-free cast redbrasses contain bismuth and selenium as principaladditives.

Bronzes: Copper alloys in which the principal alloyingelement is usually tin, and which contain other metalssuch as aluminum, lead, phosphorous, and silicon, butnot zinc or nickel.

Copper Nickels : Copper alloys with nickel as theprincipal alloying metal.

Copper-nickel-zinc-alloys : Copper alloys containingnickel and zinc, as the principal and secondaryelements; commonly known as nickel silver.

Leaded coppers : Cast copper alloys containing 20%or more lead, usually a small amount of silver, but nozinc or tin.

Special alloys : Copper alloys with compositions notcovered by the above descriptions

Master alloys and hardeners are also produced by aselect group of ingotmakers for use by others inperforming certain functions in their melt. Masteralloys usually contain 10-15% of the desired metaland the remainder is copper. They perform thefunction of making the addition of potentially difficultmetals easier to a melt. Master alloys are produced asshot or ingot form and are used as a melt addition todeoxidize, harden, improve fluidity or controlcomposition in many base alloys. For example,

phosphor copper master alloy is used as a deoxidizingadditive in making copper tube.

Refined Copper. According to data collected by theU.S. Geological Survey, 42,100 tons of refined copperwas produced from scrap in 2007 down significantlyfrom 460,000 tons produced in 1993. Refinedproducts formed include cathode, ingots, billets, shot(small metallic pellets), wire bar and continuous castrod. In addition, only about 137 tons of copperpowder was also produced from scrap in 2007. Table12 shows the manner in which copper is extractedfrom scrap and the form of recovery from 1995

through 2007. Owing to the few plants actually fire-refining, this data is currently withheld by the reportingagency (U.S. Geological Survey), but included in thetotal refined number. The historical production ofrefined secondary copper in the United States for theyears 1968 through 2008 is shown on Table 7 . Thedecreased recovery of secondary copper since 1987,from 27% to 3% in 2007 can be observed on Table 7 .

Copper Anodes for Plating . Copper anodes areproduced by ingot makers and foundries in severalshapes designed for ease use in plating. Copperanodes that contain phosphorus are designed for usein copper sulfate plating systems. Pure copper anodesare used in copper cyanide and other alkaline platingsystems. Selecting the correct anode for platingdepends on the following characteristics

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