Millberry copper scrap is trading at the same level in Europe as the London Metal Exchange (LME) copper cash price, as buyers turn to high-grade scrap to replace the limited availability of cathodes that were pre-emptively shipped to the US to avoid potential tariffs under US president Donald Trump.
The Argus weekly assessment for Millberry (bare bright) rose to 99.5-100pc of the LME cash price on 17 June, from 98-99.5pc on 9 June. Europe #1 (Berry/Candy) was last assessed at 97.75-98.75pc of the LME cash price and Europe #2 (Birch/Cliff) was at 91-93pc.
Millberry is a suitable substitute for copper cathode owing to its high copper content of around 99.95pc, while even Berry/Candy with slightly lower copper content, is also a viable alternative. Birch/Cliff scrap, a more mixed grade, requires more processing and yields lower copper output, but is still being evaluated by some buyers because of limited cathode availability.
The price convergence is being driven by copper cathode shortages in Europe after exporters began shifting large volumes of the metal into the US earlier in the year owing to concerns that Trump will impose heavy import duties on the metal.
Trump officially ordered a section 232 investigation on 25 February into whether copper imports threaten US national security, encompassing all forms of copper, including raw mined copper, copper concentrate, refined copper, copper alloys, scrap and derivative products. Section 232 is the same basis on which the US applied 25pc tariffs on steel and aluminium imports, which it raised to 50pc at the start of the month.
Fears that copper could face similar measures spurred exporters to ship material to the US, rapidly draining European and Asian LME warehouses of cathodes.
The shift in market behaviour caused LME on-warrant copper stocks to plummet by over 78pc from the start of the year to 54,400t today.
Copper prices on the US Comex exchange have surged on the drive to shift metal into US warehouses, pushing the arbitrage between LME and Comex benchmarks to record highs. The arbitrage between Comex spot-month copper and LME cash prices was $868.95/t in favour of Comex on 18 June, down from a peak of $1,862.13/t on 26 March but still easily strong enough to make sellers of Comex-deliverable cathode likely to choose the US option.
"Cathode premiums are going up in Europe mainly because of the arbitrage rather than demand, which is not particularly strong," a trader told Argus, referencing that premiums in Europe are at record highs because of critical supply shortages for immediate delivery. The Argus assessment of the delivered Germany copper cathode premium to the LME cash price rose to $270-290/t on 17 June, up by 56pc since mid-March.
Offers for cathode were heard at premiums as high as $300/t delivered Germany this week, demonstrating that the shortage is likely to continue to push premiums higher.
Sources expect cathode premiums to remain elevated until the Section 232 investigation is officially concluded in late November 2025, which means demand for high-grade scrap will be sustained in the near term.
"Because of the lack of cathodes, I have people I haven't heard from in five years come to me asking for scrap," a trader noted, referencing that the current tightness in the cathode market is supporting a higher demand for high-grade copper scrap. Several market participants said they would not be surprised if copper scrap temporarily begins trading at a premium to the LME price in Europe given the scarcity of cathodes.
