The present situation and Price influencing factors of SMM: waste Aluminum Industry and the Prospect of 2022 trend [SMM Analysis]

"SMM South China Annual meeting | an in-depth Analysis of the Global economy, Copper, Aluminum and Zinc fundamentals and Price trend in 2022

On December 10th, at the aluminum special session of 2021SMM South China Nonferrous Metals Industry Annual meeting, SMM senior analyst Yi Liang made a special analysis on the prospect of waste aluminum price from 2021 to 2022, including the main application industries of domestic waste aluminum, the influencing factors of waste aluminum price, the development status of waste aluminum industry and the prospect of waste aluminum price.

Main application industries of waste aluminum in China

From the source point of view, the current domestic waste aluminum mainly comes from two aspects: aluminum processing and social waste recycling; from the type point of view, the current waste aluminum mainly includes raw aluminum, cooked aluminum, new materials and old materials; from the point of view of terminal application, at present, waste aluminum is mainly used in recycled casting alloy, profile and strip foil industry.

Factors affecting the Price of waste Aluminum

The price of waste aluminum is mainly determined by three parts: composition, water yield and tax cost.

There are mainly three kinds of chemical composition of waste aluminum, the content of magazine, the composition of aluminum alloy, the content of other important metals, and the price of waste aluminum is also different in different cases. The effluent rate is to judge the amount of metal that can be used by waste aluminum, thus affecting the price.

With regard to tax costs, at present, domestic taxes have corresponding preferential policies for the recycling of waste aluminum, which is usually 80.9% at present.

Development status of waste Aluminum Industry

At present, the output of new materials of waste aluminum also slows down due to the limited capacity of electrolytic aluminum. The waste aluminum comes from the consumption of electrolytic aluminum in the past, and the average recovery cycle is about 15 years. Due to the substantial increase in electrolytic aluminum consumption 15 years ago, the corresponding old materials began to enter the recycling cycle.

At present, there are many restrictions on the import of waste aluminum in China, and overseas is affected by the epidemic, the import of waste aluminum in China is decreasing year by year, so the net import of unwrought aluminum alloy in China has become regular since 2020.

Malaysia will raise the standard of importing waste aluminum next year, and the EU has imposed restrictions on the import and export of waste aluminum, but because these two aspects account for a relatively small proportion of waste aluminum in China, it has little direct impact.

Returning to the industrial chain, due to the poor consumption of real estate and automobile end, the consumption growth rate of traditional recycled aluminum has also been affected by a corresponding slowdown, in this state, the supply of waste aluminum will be obviously surplus, which is expected to lead to a decline in the import of unwrought aluminum alloy by the following year.

The consumption of traditional recycled aluminum is limited, so the current consumption highlights of recycled aluminum are mainly focused on the grade reduction of deformed aluminum alloy and the return of general-purpose cooked aluminum to wrought aluminum.

Prospect of waste aluminum price

It is worth noting that after aluminum ash is included in the national hazardous waste list, the increase in treatment costs will increase the cost of waste aluminum, and the high silicon price will increase the value advantage of high silicon alloy waste aluminum. This part will make the price difference of raw aluminum concentrate fluctuate positively with the price difference between silicon and aluminum.

In addition, from the point of view of the balance of supply and demand, if real estate and automobile consumption remain weak, the growth rate of waste aluminum consumption will continue to slow down in 2022, then the price gap of mainstream waste aluminum such as profile aluminum and mechanical raw aluminum waste will be widened, but the impact of large material 1gamma 8 series waste aluminum will be less affected, and its scrap price difference will be more affected by aluminum price fluctuations, and the average value will be narrowed.

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