With a Possible Copper Shortage Looming, Should I Hold on to my Scrap Copper?

In recent months, the whisper of a looming copper shortage has grown into a chorus, with predictions of its effects rippling out a decade or more into the future. The logic behind this assumption appears sound: copper is an increasingly vital commodity in our modern world. From the smartphones in our pockets to the burgeoning fleet of EV vehicles, copper is indispensable. Adding to this, the price of copper on the exchange market continues to soar, partly due to the very real threat of tariffs. As our lives become more intertwined with Wi-Fi-enabled devices—all of which rely on copper—it's only natural to assume that demand will continue its relentless ascent. Couple this with the seemingly distant prospect of truly free and open trade, making copper imports potentially expensive, and the conclusion seems obvious: the price of copper is likely to keep rising. This has led many to a seemingly natural assumption: hold onto your scrap copper instead of selling it to a scrap yard. However, in this blog, we'll explore why this seemingly reasonable assumption might actually lead to losing money rather than making it in the long run.

Scrap Copper Degrades

While the allure of a rising copper market might tempt you to stockpile your scrap, it's crucial to consider a less discussed but equally significant factor: degradation. Unlike a fine wine, scrap copper doesn't improve with age. Exposure to the elements – moisture, oxygen, and varying temperatures – initiates a slow but steady process of oxidation. This forms a layer of patina, often green or brownish, which isn't pure copper and actually reduces the overall metallic content. Furthermore, scrap copper, by its very nature, often contains impurities or is subject to contamination from other materials it was once part of. Over time, these contaminants can lead to further degradation, making the copper less desirable for recycling and requiring more intensive (and thus more costly) processing to extract pure metal. This gradual decline in quality directly translates to a decrease in its intrinsic value, meaning that the longer you hold onto your scrap, the less it might be worth when you finally decide to sell.

Surge in Virgin Copper Mining

The perceived threat of a looming copper shortage, driven by ever-increasing demand from electrification and green technologies, often fuels the assumption of perpetually rising prices. However, a crucial counterpoint to consider is the industry's response to such supply-demand imbalances. When copper prices rise significantly and persistently, it acts as a powerful incentive for increased investment in the mining sector. This can lead to the accelerated development of existing projects, the reopening of dormant mines, and, crucially, the exploration and opening of entirely new copper mines. While these new projects have long lead times, a sustained period of high prices can justify the substantial capital expenditure required. A surge in primary copper output from these new and expanded mines would directly increase the global supply of virgin copper. As the overall market becomes better supplied with newly mined material, the pressure on prices, including those for scrap copper, would naturally ease, potentially reducing its value despite its utility.

Price of Copper Storage

While holding onto your scrap copper might be appealing, the practicalities of storing large quantities can quickly erode any potential profits. First and foremost, secure storage space isn't free; whether it's a dedicated shed, a rented unit, or even just the valuable footprint it occupies in your own property, there's an inherent cost. Beyond that, the risk of theft is a very real concern for valuable metals like copper, necessitating investments in security measures such as robust locks, alarms, or even CCTV, all of which add to your overhead. Furthermore, proper storage is crucial to prevent the degradation discussed earlier; leaving copper exposed to the elements can accelerate oxidation and contamination, further diminishing its value. Ultimately, these ongoing expenses – rent, security, and the hidden cost of quality depreciation – chip away at the speculative profit margin, often making the immediate sale to a reputable scrap yard a far more financially sound decision than attempting to become a long-term copper hoarder.

Finally, it's impossible to know what tomorrow brings. So its always best to sell today. If you're looking for the best copper price in Ireland, always consider selling to us at Galway Metal Company Ltd.