SMM Exclusive: Global Aluminium Scrap Research

SHANGHAI, Aug 1 (SMM) – Energy saving and environmental protection have become the primary focus of various countries around the world as they all released carbon neutrality and circular economy policies. The energy required to produce 1 mt of secondary aluminium is only about 5% of that of primary aluminium, which shows the significant energy-saving and environmental advantages of secondary aluminium production, and thus promotes the rapid development of the global aluminium scrap recycling industry.

China, the US, Europe and India are the leading aluminium scrap production regions, accounting for nearly 80% of the world's total. According to SMM, in 2021, the total amount of old aluminium scrap generated in the world's major regions was 20.49 million mt, and it is expected to rise to about 52.05 million mt by 2042. The CAGR of that will be about 7% from 2020 to 2025, mainly due to the release of the global carbon-neutral policy and a boost in the recycling rate, which will boost growth in the recycling amount of aluminium scrap. The CAGR from 2026 to 2042 is expected to be 4%, driven by the fact that a large amount of aluminium products used in the past few years will reach the end of their service life.

According to SMM, aluminium scrap production in Europe is expected to rise by more than 80% between 2022 and 2042, from 5.36 million mt to 9.942 million mt. The growth comes from the significant rise in the sales and aluminium unit consumption of new energy vehicles in Europe. In addition, Europe has released the Circular Economy Plan and the Secondary Aluminium Action Plan, which clearly set goals for the use ratio of secondary aluminium and the construction of recycling systems, promoting the growth of supply and demand for aluminium scrap in Europe.

According to SMM, between 2022 and 2042, the US aluminium scrap production will rise from 4.575 million mt to 8.576 million mt. The reason for the growth of US aluminium scrap recycling volume is somewhat similar to that of Europe, that is a rise in aluminium unit consumption in the US automotive industry as a result of automotive light-weighting, which drives an increase in the US aluminium scrap production. Moreover, the US environmental protection and recycling-related policies will also greatly promote the development of the US recycling industry.

As a latecomer to industrialization, India's many aluminium products are still in the early stage of operation, which leads to less aluminium scrap production than other major countries. According to SMM, between 2022 and 2042, India's total aluminium scrap production is expected to rise from 1.051 million mt to 4.401 million mt. In the future, the rapid development of industrialization in India will promote the aluminium consumption in construction, power and other industries. Meanwhile, India's 2070 carbon neutral target will also vigorously promote the development of India's aluminium scrap recycling industry.

In the long run, the demand for aluminium scrap will increase and the construction of recycling system will be improved in every country driven by their carbon emission targets, and a rapid growth will be seen in the aluminium scrap industry. Recognizing the future development trend of the global aluminium scrap market is crucial for secondary aluminium companies, aluminium scrap traders, and aluminium scrap recycling and dismantling plants.