Analysis of the future development direction of secondary aluminium industry

SHANGHAI, Apr 13 (SMM) –   The proposal of carbon neutrality during the plenary sessions and the fact that aluminium smelting is an energy-intensive industry have put secondary aluminium industry under the spotlight as it could greatly save energy and reduce carbon due to the raw materials that are used in the production process. 

SMM understands that the traditional secondary aluminium industry could develop in two directions. Firstly, improve the recycling of wrought aluminium alloy to produce products that are the same as the original products (e.g. aluminium can to aluminium can, aluminium window to aluminium window). Secondly, improve the performance of traditional casting alloys so that they can be used not only in gasoline vehicles.

Even if a greater amount of aluminium scrap taint is produced, the proportion of recycling aluminium scrap taint to produce products that are the same as the original products is still low. Therefore, the recycling of wrought aluminium alloy to produce products that are the same as the original products will have more growth potential. Traditional casting aluminium alloys have lower requirements on aluminium scrap due to relatively low aluminium content. 

Traditional casting aluminium alloy market is mature enough after a long time of development and consumes more than 70% of the aluminium scrap supply. The proportion of aluminium scrap used in wrought aluminium alloys has expanded rapidly since the implementation of the supply-side reform due to various factors such as cost, energy consumption, and supply of primary aluminium. 

The proportion of aluminium scrap used in aluminium extrusion has increased the fastest in recent years due to even lower requirements. Following the supply-side reform, carbon neutrality will be the second restriction on aluminium capacity expansions. In this context, the recycling of wrought aluminium alloy is the most direct and effective means to solve raw material shortages.

As development of gasoline vehicle sector, the biggest consumer of traditional cast aluminium alloys, faces bottlenecks, improving product performance and cost-effectiveness is the way out for the casting aluminium alloy industry. There are two ways to achieve this. One is to further improve certain special properties of alloy, such as heat conduction, electrical conductivity, corrosion resistance, and high strength, in order to expand the applications of casting alloys. 

The second is to reduce costs and increase efficiency. The performance of casting alloys is gradually close to or even equivalent to that of certain traditional wrought alloys. For example, certain casting alloys can meet elongation requirements for battery tray parts of new energy vehicles. However, it should be noted that higher performance requirements means that high-performance alloys will use a larger proportion of primary aluminium, which will curb consumption of secondary aluminium in the short term. 

It takes time for secondary aluminium industry to develop in the two directions mentioned above. Traditional secondary casting aluminium alloy will remain the mainstream in the short term. Market still needs to pay attention to the impact of "imported raw material policy", "aluminium ash treatment", "tax invoice" on the traditional secondary aluminium industry.

For more updates on the China aluminium sector please subscribe to China Aluminium Weekly.