Recycled metal will drive a massive wave of aluminum that’s about to hit global markets, as the industry comes under more pressure to decarbonize.
Aluminum prices have rallied 11% this year, creating an incentive for recyclers to go out in search of additional sources of scrap. In recent years, primary aluminum smelters have also faced periodic squeezes on profitability arising from spikes in the cost of energy and raw materials, while they’re also under pressure to reduce emissions.
In the US, recycled aluminum will make up two-thirds of unwrought supply by 2026, up from 45% in 2015, Harbor said. That comes as major industry players invest in the scrap market over the past year. Recycling aluminum is not only less costly, but it’s also far less energy intensive than primary production. The main challenges are to improve the efficiency of collecting and processing scrap.