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Non-Ferrous Metals, Steel Scrap and EU Supply Risks
Alongside EU policy risks, the copper spot market remains tight, while Asian aluminum and zinc are under pressure from rising inventories. Steel scrap imports into Vietnam rebounded significantly in September.
At a Glance
| Topic | Key Indicator | Signal | Priority |
|---|---|---|---|
| I. EU WSR | 16/10/2026 | Vietnam not proposed as a destination for metal scrap | Urgent |
| II. Copper | 14.526 USD/t | Tight spot supply; widening backwardation | Close monitoring |
| III. Aluminum châu Á | ~202 USD/t premium | Premiums fall sharply despite high LME prices | Close monitoring |
| IV. Zinc | ~3.715 USD/t | LME inventories rise; prices retreat from peak | Monitor |
| V. Steel Scrap VN | 485.080 t | September imports up 27.2% m/m | Monitor |
| VI. Asia–Europe Freight | 3.260 USD/FEU | Freight rates fall; carbon surcharges rise | Monitor |
Detailed Analysis
EU Considers Restrictions on Metal Scrap Flows to Vietnam
What is changing?
In its 8 October report, BIR noted that the list published by the EU on 18 September does not propose Vietnam as a destination for ferrous and non-ferrous metal scrap. Under the new mechanism, from 21 May 2027, each country will only be permitted to receive specific waste streams approved by the EU. Vietnam and 15 other countries are currently excluded from the proposal. The final list has not yet been decided.
Assessment
If the draft remains unchanged, EU scrap could become oversupplied in Europe and local prices could fall, while Vietnamese businesses could lose direct access. Vietnam’s response should focus on processing capacity, pollution control, and actual plant operating data.
Copper Recovers as China Reopens
Developments
LME cash copper reached USD 14,526/t on 8 October, up around 1.2% for the week. LME inventories fell by 13,425 tonnes to 235,225 tonnes; cash–three-month backwardation widened to USD 109/t, indicating that spot availability remains tight.
Assessment
Demand for copper scrap and cathodes may remain strong. Recyclers and traders should shorten quotation validity periods, manage timing gaps between scrap purchases and sales, and lock in output prices.
Asian Aluminum: Premiums Fall Sharply Despite High LME Prices
Developments
CRU estimates the Asian CIF premium at around USD 202/t, well below the Q3 MJP benchmark of USD 395/t. Q4 premium offers have fallen to USD 245–260/t amid rising inventories and cautious demand. Premiums in Vietnam and Thailand are currently holding up better than in some other Asian markets.
Assessment
LME prices do not fully reflect actual selling prices. Buyers have grounds to negotiate lower premiums for aluminum ingots; for aluminum scrap, smelting margins may narrow if scrap prices do not fall accordingly.
Zinc Flows Shift from China to LME Warehouses
Developments
China exported 40,668 tonnes of refined zinc in August and became a net exporter over the first eight months of the year. LME inventories rose to 126,975 tonnes, while the three-month price fell from a peak of USD 4,065 to around USD 3,715/t. Meanwhile, Western refined production declined 3.4% in the first half of the year.
Assessment
Refined zinc is becoming more readily available in Asia, but the Western market remains undersupplied. For zinc jumbo and zinc ash/dross, monitor LME prices, regional premiums, and treatment/recovery margins together.
Vietnam’s Steel Scrap Imports Rise Significantly in September
Developments
Vietnam imported 485,080 tonnes of steel scrap in September, up 27.2% from August. The cumulative total for the first nine months reached 4.66 million tonnes, up 1.8% year on year. Japan remained the largest supplier in September at 170,703 tonnes, although this was down 43.6% year on year.
Assessment
Scrap supply into Vietnam is not moving uniformly; differences depend on origin, grade, freight costs, and mills’ purchasing appetite. This provides a basis for businesses to develop alternative sourcing strategies across Japan, the US, Australia, and ASEAN markets.
Asia–Europe Freight Rates Fall, but Carbon Costs Are Now on the Bill
Developments
Freightos reports Asia–Northern Europe rates at around USD 3,260/FEU and Asia–Mediterranean rates at USD 3,555/FEU, as more vessels return to the Red Sea route. From 1 October, Maersk introduced its Q4 emissions surcharge; for example, the Northern Europe–Far East route carries a surcharge of USD 57 per 20′ container and USD 114 per 40′ container.
Assessment
Lower base freight rates do not translate fully into lower landed costs. When quoting CFR prices, ocean freight, carbon surcharges, and port charges should be itemized separately.
What to Watch Next
- Before 16 OctoberEU WSR consultation submission. Whether evidence from Vietnam will be sufficient to change the proposal concerning ferrous and non-ferrous metal scrap.
- OngoingAluminum and zinc margins. Track LME prices, Asian premiums, input scrap prices, and recovery margins together; avoid assessing opportunities based solely on benchmark metal prices.
- October dataVietnam’s steel scrap sources. Check whether September’s increase in imports continues in October, particularly from Japan, the US, and Australia, alongside domestic mills’ purchasing response.
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