Global push for recycled aluminium and copper capacity could signal shifts in non-ferrous scrap trade

Investments in recycled-content aluminium and copper production worldwide have sparked unease among traders and industry experts, with many questioning whether non-ferrous scrap exports will face a tightening landscape in the years ahead. This issue took centre stage at the Bureau of International Recycling (BIR) Non-Ferrous Division meeting held in Singapore (27) 28-29 October 2024, where industry leaders explored both the opportunities and challenges in the growing global race for recycled metals.

At the BIR World Recycling Convention, speakers presented ambitious expansion plans for melt shop capacity, primarily focused on Asia and North America. This led to vigorous debate over the future availability of scrap for export.

ASEAN in the spotlight: China's investments in Thailand

Vivian Jiang of Ningbo Jintian Copper, one of China's leading copper producers, outlined her company's plans to extend operations beyond its borders. Following a record year in which it produced 1.9 million tonnes of copper and brass and achieved $20 billion in revenue, Ningbo Jintian is investing in a new facility in Thailand. This move signals China's growing influence in Southeast Asia's industrial landscape, where producers increasingly seek to bolster recycled-content production to meet rising global demand.

Meanwhile, Anthony Wong of Delta Metal, an aluminium producer with an established presence in South China, described his company's parallel strategy to scale its recycled aluminium output. With four secondary ingot plants in the region, Delta Metal aims to add a Thai production facility to increase its capacity by hundreds of thousands of tons. Wong, however, cautioned investors to tread carefully in Southeast Asia, underscoring the importance of understanding cultural norms, regulatory frameworks, and currency fluctuations. "No shortcuts," he advised. "Walk in without understanding the landscape, and it will cost you."

North America's scramble for recycled-content innovation

Shifting to North America, Sean Davidson of metals pricing firm Davis Index raised concerns about the long-term outlook for scrap exports, especially high-grade copper. He projected an emerging scarcity in exportable scrap as the U.S. and Europe increase investments to retain high-quality scrap domestically for recycled-content production. "It's coming," he said of a potential supply crunch, with No. 1 and No. 2 copper grades forecasted to be increasingly tight by the decade's end.

Davidson also emphasised the innovation underway in the U.S. and Europe to transform aluminium scrap into new, low-carbon aluminium. "Billions are being invested in scrap-rich regions," he remarked, hinting that these advancements could further restrict overseas access to key materials.

Panel consensus: Global scrap trade to remain, but with caveats

In the lively panel discussion that followed, OmniSource's Dong Shen offered a more moderate view, suggesting that cross-border scrap trade would likely continue, albeit within a more constrained market. Dong, along with other panellists, noted that while the added capacity in ASEAN and China could mean tighter local supplies, the regions' scrap generation is also projected to grow, creating new opportunities for internal markets.

An evolving regulatory environment could further impact scrap trade dynamics. Jiang shared insights into potential changes in China's import policies, which could allow a wider range of "acceptable" scrap types, including alloy imports currently restricted or uncategorised. Meanwhile, Wong pointed to a recent Chinese government policy shift that appears aimed at gradually relaxing import rules, though he warned the process could be slow and complex.

With billions at stake, ongoing investments in recycled content capacity are poised to redraw the global non-ferrous scrap trade map. As demand for low-carbon metals rises, the industry will continue to balance innovation, regulatory shifts, and supply dynamics in the years ahead. The debate, much like the industry, is far from over.

Image credit: BIR.org