WHAT IS SCRAP RECYCLING?
Aluminium is one of the most widely used metals worldwide owing to its salient features like lightweight, ductile, non-magnetic, corrosion resistance, excellent heat and electricity conductor, good reflector, high strength-to-weight ratio and 100% recyclable. But the production of primary aluminium comes with its own set of drawbacks, such as high-energy intensive, Capex heavy, and carbon emitter. Globally, the aluminium sector alone contributes nearly 2 per cent of the global carbon emissions – equivalent to 1.1 million tonnes of carbon-di-oxide. With the world becoming environment-conscious and consumers seeking green aluminium, the secondary source of aluminium production through recycled scrap has replaced primary aluminium.
As said earlier, aluminium is 100% recyclable, and thus, post-consumer aluminium scrap can be re- melted at casthouse and turned into an original alloy, at a cheaper cost and with less energy. Recycling scrap aluminium requires only 5 per cent of the energy needed for producing primary aluminium through the electrolysis of alumina. The recycling of aluminium scrap is cost-saving, even after the expenses of collection, separation and recycling are taken into account. Re-use of post-consumer aluminium scrap, in a way, also plays a crucial role in saving natural resources. The aluminium scrap market is mainly led by China, the United States, the European Union, and India, contributing to the development of the world economy and production.
MARKET INSIGHT
An integrated aluminium recycling plant includes both refiners and remelters. Refiners produce casting alloys and deoxidise aluminium from scraps of varying compositions. First, all types of scraps are mixed, then alloying elements are added, and finally remove unwanted components after the melting process to produce alloys to the specifications of customers’ needs. Remelters produce wrought alloys, using end-of- life scrap based on established closed-loop recycling systems, in the form of extrusion billets and rolling ingots, mainly from clean and sorted wrought alloy scrap. For instance, used beverage cans are remelted and produced into new cans or old window profiles into new window frames.
MARKET SIZE
World recycled aluminium usage increased from 24.3 million tonnes in 2020 to 26.0 million tonnes in 2021. Castings accounted for about 51% of the total usage, followed by can stock at 19% and pellets for steel at 14%. In the present year, world recycled aluminium usage is expected to further boost to more than 27 million tonnes. While the industry-leading companies have pledged to accelerate the use and production of recycled aluminium, European Aluminium Council has laid out its Circular Aluminium Action Plan to achieve aluminium’s full potential by 2030. Accordingly, all the end-of-life products of aluminium are being collected and recycled efficiently to maximise the recycling rate. With an efficient policy framework in place, the council aims to meet 50% of Europe’s aluminium requirement through recycling by 2050. This development is expected to reduce the import of primary aluminium and replace it with domestic recycled aluminium, thereby lowering the CO2 emissions by about 39 million tonnes by 2050.
The demand for recycled aluminium is expected to grow at a healthy pace in the coming years and is forecasted to reach over 32 million tonnes by 2026. The global trade (imports) of aluminium scrap declined from 10.3 million tonnes (valued at US$ 13.5 billion) in 2019 to about 9.5 million tonnes (valued at US$ 11.6 billion) in 2020. India was the top importer of scrap, securing 1,286,000 tonnes at US$1.8 billion, followed by South Korea sourcing 965,000 tonnes at US$1.1 billion, Germany 925,000 tonnes at US$1.1 billion, and China 825,000 tonnes at US$1 billion. The US retained the top position in exporting at around 1.8 million tonnes of aluminium scrap, followed by Germany, Canada, France, and the UK in 2020.
MARKET SEGMENTATION
China is the world’s largest producer and consumer of aluminium, both primary and recycled. Recycled aluminium usage in the country was estimated at over 11 million tonnes in 2021, which was about 42% of the global recycled aluminium usage. In the same year, China used 5.4 million tonnes of recycled aluminium in automotive castings and about 1.2 million tonnes for canstock applications. The next leading consumer of recycled aluminium is the United States. Recycled aluminium usage in North America is estimated at around 3.4 million tonnes in 2021, accounting for about 13% of the global usage. The demand is forecast to reach 3.9 million tonnes by 2026 at a CAGR of 2.9%. South America’s recycled aluminium usage was estimated at around 1.6 million tonnes in 2021. Around 59% of the total recycled aluminium used in the South American region during 2021 was accounted for by castings, 25.5% by canstock and the rest by pellet for steel, extrusions and other applications. Western Europe accounted for around 17% of the world's recycled aluminium usage in 2021, while the usage of recycled aluminium in Eastern Europe was estimated at around 1.5 million tonnes.
September 28, 2021