Bernstein: Recovered old copper scrap could offset half of 2026 demand growth, putting near-term pressure on copper prices
High copper prices are encouraging the recovery of old copper scrap. Bernstein estimates that this source of supply could increase by about 500 thousand tonnes in 2026, equivalent to the output of several new mining projects. Combined with stockpiling driven by tariff concerns and inventory accumulation, this makes the bank more bearish on copper prices in the short term, although it retains its long-term bullish view.
Original source：BernsteinFirst published on Unhidea：Original source date：
Key takeaway
Long-term constraints on copper supply remain, but high prices are encouraging the recovery of old copper scrap, providing a source of rapid adjustment to near-term supply and demand beyond new mines.
How much additional recovered supply can high copper prices bring?
Bernstein expects price-sensitive scrap recovery to offset about half of the increase in copper demand in 2026. Its starting point is that, as of October, the average copper price in 2026 was up 32% year on year. Based on the historical regression relationship, full-year consumption of old copper scrap could rise by about 10%.
Using old copper scrap consumption of about 5 million tonnes in 2025 as a base, growth of 10% translates into about 500 thousand tonnes of additional recycled supply, equivalent to the output of several newly built copper mine projects. High prices thus both reflect tight supply and demand and encourage recovery, increasing supply.
This estimate relies on the historical relationship between prices and recovery volumes. China's copper scrap import data since 2020 support this positive correlation, but the relationship was weaker in 2016–2019, which Bernstein believes may have been affected by a macroeconomic slowdown.
Why is old copper scrap better able to adjust supply and demand than processing offcuts?
Old copper scrap comes from end-of-life vehicles, buildings and consumer goods, and high prices make collection and processing more attractive. Bernstein estimates that approximately 600 million tonnes of copper are in use globally and about 17 million tonnes leave use each year, but only about 30% is recovered. The remainder is abandoned, unaccounted for or lost; recovery potential is not the same as supply that can be brought directly to market.
Old copper scrap contains more impurities and is usually difficult to use directly in the production of copper products with stringent raw-material specifications. Its relatively steep discount to the copper price gives smelters room to profit by removing impurities and reprocessing it into copper cathode, linking recovery incentives to usable supply.
New copper scrap consists mainly of offcuts from manufacturing. Its volume depends on processing activity, and it is usually recovered quickly. The corresponding raw-material demand and recovered supply offset each other, so it plays a smaller role in correcting supply-demand imbalances and is also less likely to increase as copper prices rise.
Why does additional recovered supply reinforce the short-term bearish view?
At the time of the report, copper was less than 5% below its all-time high. Bernstein believes a substantial part of its strength came from advance stockpiling driven by concerns over US tariffs. After reports on 10 September that tariff plans had run into obstacles over affordability, inflows into COMEX inventories slowed, but inventories continued to rise.
Since 2024, exchange copper inventories have increased by about 500 thousand tonnes, entirely driven by a rise in COMEX inventories. The bank worries that, against a backdrop of higher inventories, high prices are suppressing demand while encouraging old scrap supply, and has therefore become more bearish in the short term.
Why has increased recovery not changed the long-term bullish case?
Bernstein expects copper demand to continue growing by about 3% annually through the middle of the 2030s, while development of new copper mines remains weak. Long-term supply of old copper scrap will also grow as more copper products reach the end of their useful lives, but the bank maintains its long-term bullish view and sees a more optimistic long-term outlook.
Another constraint comes from manufacturing efficiency: consumption of new copper scrap as a share of total copper consumption has fallen from about 29% in 1990 to around 19% recently. The bank's model assumes this share remains at about 19%; further improvements in processing efficiency could lower it further, leaving this portion of recycled supply below previous expectations.
