Aluminum Scrap Market Experiences Boom

Summary: The resurgence from COVID-19's darkest days has aided in the growth of secondary commodities, such as aluminum scrap.

Fremont, CA

The world's journey to a net-zero carbon emissions economy could meanthe supply growth of primary aluminum is controlled, notably from China. At the same time, worldwide aluminum demand is expected to expand, owing to energy transition-related industries such as transportation and renewable energy from China, the United States, and Europe.

Four aluminum trade associations have asked the Group of Seven (G7) states to respond to clear and convincing evidence today that existing multilateral subsidy restrictions are inadequate to repair the magnitude and scope of state intervention in aluminum markets. Geographically, the four organizations are making the request corresponding to the G7 states. China is the major focus of the subsidy investigation request, according to the groups, because it may be preventing the globe from realizing a low-carbon economy.

Another of the world's top primary aluminum producers, Russia, has declared a plan to increase its low-carbon aluminum production. According to a Reuters article, Rusal, which has most of its operating assets in Russia but trades its stock on the Hong Kong Exchange, plans to "demerge its higher carbon assets into a separate business as part of its objective to achieve carbon neutrality by 2050."Rusal's lower-carbon assets will keep the Rusal moniker. Aluminum makers in Europe and North America, such as Alcoa, Hydro, and Novelis, have all taken attempts to incorporate low-carbon aluminum and/or scrap into their completed and semifinished products.

The two trends would probably imply a constant increase in secondary aluminum production, as it adds to aluminum supply at a far lower energy and emissions intensity, both below 5 percent compared to primary aluminum.