Recap 2020: The year witnessed significant investments in recycling plant; COVID-19 affected scrap supply chains

The year 2020 saw significant expansions in the recycling plant. Many leading companies announced huge investments in increasing the aluminium recycling capacity.

Industry data showed improved aluminium packaging recycling rates globally. According to the International Aluminium Institute, recycling of one aluminium can saves enough energy to recharge up to 20 mobile phones, while global aluminium recycling saves enough energy every year to power the whole of France. Europe has the highest Recycling Efficiency Rate (RER) in the world, recovering 81% of aluminium scrap available in the region.

Aluminium packaging recycling rates surpassed its 2020 targets by more than 5%, according to data released by the Environment Agency. The Agency reported 42,265 tonnes of aluminium packaging collected for recycling in Q3. This marks a growth of 41% year-on-year and 4% quarter-on-quarter. To date in 2020, 119,198 tonnes were collected for recycling, an increase of 48% year-on-year.

Aluminium recycling rates

The Aluminum Association and the Can Manufacturers Institute (CMI) released 2020 report — The Aluminum Can Advantage: Sustainability Key Performance Indicators 2020— indicating consumers recycle aluminium cans at nearly double the rate of plastic bottles.

The average aluminium can made in the United States contained about 73 percent recycled content compared to 23 percent for glass bottles and less than 6 percent for plastic. Aluminium became a key driver of the financial viability of the recycling system in the United States.

The aluminium can remained by far the most valuable package in the recycling bin, with a value per ton of $1,210/ton compared to $237/ton for plastic.

A summary chart details the findings below:

The Aluminum Association and CMI also released a new document Every Can Counts: An Aluminum Beverage Can Recycling Manifesto to improve the aluminium can recycle rate in the United States. This will highlight the critical importance of aluminium can recycling for the economy and the environment. 

COVID-19 impact on European Aluminium scraps suppliers

The aluminium scrap shortage panic grew among the European aluminium alloy producers. The lockdowns imposed in Europe due to the COVID-19 pandemic, reflected scrap generation decline as factory activities remained suspended and third-party collections were turned away by several major scrapyards.

European aluminium scrap prices started rising in September as demand was increasing in the market tightened by limited supply due to the lack of fresh scrap generation over months of COVID-19 lockdown restrictions. Usage of scrap also fell but not as much as the generation of new scrap, as some manufacturers tried to maintain operations using raw material stocks in the initial phase of the pandemic.

China’s aluminium scrap imports quota for 2020

China approved 121,000 tonnes of aluminium scrap imports in its 12 batch of quota in 2020, according to the China Solid Waste and Chemicals Management report, bringing total approved amount of aluminium scrap import quotas to 818,000 tonnes so far this year. In the 11th batch of aluminium scrap import quotas, China permitted 2,610 tonnes.

SMM estimated China’s aluminium scrap import quotas for the fourth quarter of the year to come in at 130,000 tonnes to 150,000 tonnes, much lower from Q3.

Based on the correlation between aluminium scrap imports and ADC12 secondary aluminium prices over the past two years, SMM believes the latter to exceed those of A00 aluminium ingots in the short term. Imports of aluminium alloy ingots are estimated to become popular again to fill the supply deficit of aluminium scrap.

Separately, China on February 18, announced that it would accept applications for new tariff exemptions on aluminium and other metal scraps, besides 696 other products imported from the United States. These exemptions are the third and most substantial set to be granted to date by China since the start of the trade dispute with the United States

Secondary aluminium recovery in the US

According to the latest report from United States Geological Survey for aluminium, total aluminium recovered from scrap in September 2020 was 271,000 tonnes, essentially unchanged from that in August 2020, 7% less than that in September 2019, and 7% less than that in September 2018. Of this, 147,000 tonnes of aluminium was recovered from new scrap, and 124,000 tonnes was recovered from old scrap.

For the first nine months of 2020, total aluminium recovery from scrap stood at about 2.4 million tonnes.

Inventories of secondary aluminium (North American Secondary Aluminium Alloy Contract) in LME-approved warehouses, including off-warrant inventories, in the United States decreased to 32,923 tonnes at the end of September from 34,121 tonnes at the end of August.

Investments and expansions

• Rio Tinto announced investment of US $8.4 million to expand the recycling capacity of its aluminium operations in Saguenay- Lac-Saint-Jean, Quebec, to offer rolled product customers in North America a new, sustainable solution combining low-carbon and recycled aluminium. The new aluminium recycling system will have an initial production capacity of 22,000 tonnes of remelted aluminium per year.
• ALUMIL invested €2.8 million in a new aluminium scrap separation unit. The objective of the organization is to use up to 70% of recycled aluminium scrap on the production line for the next 3 years.
• Norsk Hydro announced its aluminium recycling plant in Azuqueca, Spain ramped-up to produce the sought-after recycled aluminium Hydro CIRCA.
• The German-based Scholz Recycling Group and Shandong Weiqiao Pioneering Group Co.  signed a memorandum of understanding to build a recycling industrial park in the Chinese City of Binzhou. The industrial recycling park will source more than 200,000 tonnes of aluminium scrap for Hongqiao, a Weiqiao subsidiary.
• Audubon Metals LLC will build its second aluminium scrap sorting and aluminium alloys production facility by investing $50 million.
• Regal Metal announced it will construct a recycled aluminium project in Shanxi province. The plant will have an annual capacity of 300,000 tonnes of secondary aluminium. The first phase of the project involves 100,000 tonnes of secondary aluminium capacity.

Some other highlights

• Aluminium Industry experts emphasised the urgent need for BIS (The Bureau of Indian Standards) quality standards for aluminium scrap to hinder the imports and use of cheap and sub-standard scrap in India. Most of the aluminium scrap finding its way to India is from the United States. In FY20, India witnessed the highest ever scrap imports from the US, an increase of 327% since FY16. So, from 8% in FY16, the share of scrap imports from the US to India rose to 24%.
• The cabinet of ministers’ of the island nation in South Asia, Sri Lanka decided to ban the export of metals scrap, which includes aluminium in a proposal to save them for domestic production.
• The Scottish Parliament voted to approve Regulations for the establishment of Scotland’s Deposit Scheme. This would increase the recycling of single-use drinks containers in Scotland. 
• Novelis Inc. partnered with Nespresso, the pioneer of premium portioned coffee, to roll-out the first coffee capsule made from 80% recycled aluminium. The highly recycled, a sustainable alloy is featured in Nespresso's new coffee capsules.
• Leicester City Council launched a new citywide campaign to encourage city households to recycle more cans, foil and aerosols.
• The new standards for aluminium scrap metal was published by China’s market regulator on 19th Jan’20, elucidating on what materials will be permitted to import in the country from the second half of this year. The new standards declared the aluminium scrap materials with minimum aluminium and aluminium alloy content is set at 100% for recycled aluminium ingots, 98% for aluminium castings and 91% for aluminium blocks.

According to the International Aluminium Institute’s, every year, more than 30 million tonnes of aluminium scrap is recycled globally, ensuring its status as one of the most recycled materials on the planet.

Marlen Bertram, IAI’s Director said: “Aluminium is central to a sustainable future, because of its unique combination of properties, including lightness, strength, durability, and recyclability. Rapid population and economic growth over the coming decade mean that global demand for aluminium will double through to 2050, and this will be met by 50% to 60% recycled metal. To ensure a sustainable circular economy, especially post-COVID, we need to improve and maintain high recycling rates across the world."