From scrap to spotlight: Recycled aluminium ready to hit global markets in decarbonisation drive

The aluminium industry is intensifying its efforts to reduce carbon emissions, and recycling metal can revolutionise the market.

According to the Managing Director of industry consulting firm Harbor Aluminum, the world is set to add 22 million tonnes of aluminium capacity from scrap over the next five years.

Notably, China will spearhead this expansion, with projects expected to contribute approximately 15 million tonnes of new secondary capacity within the same timeframe. This surge underscores a significant shift towards sustainable practices in the aluminium sector, highlighting the critical role of recycled materials in meeting future demands while mitigating environmental impact.

On June 5, 2024, the Managing Director said at North America’s largest aluminium conference, “Scrap is the new aluminium ore.”

As aluminium prices have increased 11 per cent this year, recyclers are looking for additional scrap sources. As energy and raw material costs have spiked in recent years, aluminium smelters have experienced periodic profit squeezes.

As China's total aluminium production capacity approaches its limit, many analysts and traders anticipate a substantial increase in global prices. The key challenge will be to secure enough scrap to support the expansion of the plants. In this scenario, the potential of increased production from secondary sources to fill the gap cannot be overlooked.

As compared to primary production, recycling aluminium is more energy-efficient and cost-effective. The primary challenge is enhancing the efficiency of scrap collection and processing.

The world's demand for aluminium is rapidly recovering after the pandemic and ensuing lockdowns, driven mainly by recycled metal. Growing commitment to sustainability and environment-friendliness is the main reason behind the ramp-up in demand for recycled aluminium. Along with the demand, production is also on the rising spree with rapid project developments of recycling plants. Hence, it is high time we looked at the ongoing trend of the global aluminium recycled market and analysed the future. 

With the same purpose, AL Circle has developed a new comprehensive, industry-focused report on "World Recycled Aluminium Market Analysis - Industry Forecast to 2030".