Recycling Recap 2018: New projects, awareness activities, and imported tariffs marked the year

2018 marks an eventful year for the global secondary aluminium industry with a series of new investments, expansions, awareness activities, and also a bit of intermediate twist and turns in the market. China’s retaliatory tariffs on the US scrap exports, Aluminium Association of India’s proposal to levy 10 per cent duty on scrap import, announcement of the resumption of 10-years mothballed casthouse of Aludium were some of the important phenomena that marked the year. Now, let’s take a quick recap to some of the other notable events that moved the secondary aluminium market in 2018.

Production

The estimated recycled aluminium production for 2018 had stood at 12 million tonnes, out of forecasting global primary aluminium production of 64 million tonnes. The United States, being the only country that produces more secondary aluminium than primary, recovered 312,000 tonnes of scrap in October 2018, slightly more than that in the same period last year. Out of 312,000 tonnes, 77,000 tonnes of aluminium was recovered from new scrap and 135,000 tonnes from old scrap. The graph below shows month-on-month updates of aluminium scrap production in the US.

Expansions and investments

The world’s first POAL recycling plant for producing Ecoallene was announced to start in Italy in September 2018. POAL is a polyethylene + aluminium polycomposite recovered from food packaging. The plant will recover POAL and then turn it into a new recyclable material suitable for use in automotive, construction, giftware and other markets.

PyroGenesis Canada Inc., on the other hand, announced its receipt of a multi-million dollar order for two DROSRITE™ furnace systems from an Asian client. The Systems are the third and fourth commercial systems sold to date, and the first order from this new Client which are expected to be delivered in April 2019. Paper and packaging company Mpact also reportedly underwent a trial run at its plant in Benoni, Gauteng, to manufacture construction boards and pallets from recycled aluminium and plastic.

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Trimet invested in the modernisation of recycling plants in Gelsenkirchen and Harzgerode for enhancing productivity and sustainable use of resources. According to a news release on the website of Gutian government, construction of a secondary aluminium processing project would commence in Dajia industrial park, Gutian country, of China’s southern province of Fujian by the end 2018.

Rio Tinto reportedly extended the agreement with Scepter for an additional ten years. Rio renewed the contract for the treatment of by-product from the aluminium smelting process known as "skims" in Quebec, Canada.

 Activities at the peak

Teignbridge District Council announced the launch of a new aluminium foil recycling service to its residents. Aluminium foil trays and household wrapping foil could be put into black box for recycling alongside other metal packaging such as food/drink cans and empty aerosols. re3 launched a new recycling initiative that also aimed at encouraging its residents to recycle aluminium foils trays.

Emirates Environmental Group (EEG) which had been playing a significant role in creating environmental and sustainability awareness among local citizens and groups reportedly collected 4,000kg of aluminium cans for recycling. The organisation had set a target of 28,000kg of can collection for 2018. 

India’s capital city (Delhi) prepared to scrap all old vehicles by the end of 2018, which was expected to result in a surge in India’s aluminium scrap recovery. Under the ‘Delhi Scrapping of Vehicles Rules, 2018’ all old vehicles, including two-wheelers, would be sent for dismantling to empanelled scrap dealers. Coca Cola, on the other hand, pledged to recycle all used bottles and aluminium cans that the company sells. As part of new packaging vision, the fizzy-drink maker decided to make a shift to recyclable packaging globally. Coca Cola Myanmar also launched a nationwide recycling awareness campaign called “Tan Bo Shi Tal” to encourage public awareness on plastic and aluminium recycling.

Malaysians neither stood behind in introducing an innovative recycling service. Malaysia’s reverse-vending machine (RVM) company KLEAN together with Southeast Asian fintech firm HelloGold decided to implement a recycling scheme that offers Malaysians 0.00059 grams of investment-grade gold for each recycled plastic bottle and aluminium can.

Emirates Environmental Group (EEG) brought the nation together in October for its annual can recycling campaign for the 22nd year in a row. The yearly event registered a total collection of 313,352 kg of used aluminium cans during this period. In the very next month, a Germany-based company Strautmann Umwelttechnik presented two beverage bottle recycling machines - LiquiDrainer and BrikPress at the BrauBeviale trade fair in Nuremberg, Germany.

An Indian professor named Bhagyanathan found a new method of aluminium scrap recycling, ensuring to help small plants to produce graded quality aluminium ingots with enhanced mechanical and metallurgical properties.

China’s import tariffs on US aluminium scraps

In early 2018, China declared revised aluminium scrap import policies from the United States to continue enforcing the country’s plan to prevent the import of materials shipped into the country that do not meet the government’s definition of being recyclable. This affected China's aluminium scrap imports in the said month.

Later on, as a retaliatory move to the US tariffs on imported aluminium and steel, China in the beginning of April revived its aluminium scrap policy and imposed 25 per cent tariff on imported aluminium scrap. A few months later in August, both the US and China began imposing new rounds of penalties on each other. The latest round included China’s 25 per cent tariff on OCC, recovered paper, scrap plastics and various recovered metals. Thus, the US aluminium sent to China had a 50 per cent tariff on it instead of 25 per cent, pointed out the Institute of Scrap Recycling Industries (ISRI).

This certainly impacted the US scrap exports to China. In 2017, the United States had exported 820,000 tonnes of aluminium scrap to China, valued at $1.17 billion. This figure, however, began to drop in 2018 after the implementation of the tariffs. In May, the first full month after the 25 per cent tariff had kicked in, the volume dropped to 40,000 tonnes from 60,100 tonnes in April. In the month of June, the US exported about 37,500 tonnes of aluminium scrap to China. 

 In the first ten months of 2018, the US exported 423,000 tonnes of aluminium scrap to China, down 58 per cent from 669,000 tonnes in the same period last year.

US recycling operators and local consumers were the first victims of the trade war between China and the US.  Michigan had about $1 billion in total exports for products to China at risk because of new tariffs, as per the data from the US Chamber of Commerce.

Other twist and turns

In the meanwhile, India’s overall imports of aluminium recorded a rise by 19 per cent year-on-year in Q2 2018, primarily driven by higher volumes of scrap precipitated by China’s imposition of import duty on US scrap. So to say, China’s protectionist levies spelt unexpected trouble for the Indian primary aluminium producers.

This led to an urge from Aluminium Association of India for increasing customs duty to 10 per cent on import of aluminium end-use products to protect thousands of secondary producers of India. But the secondary aluminium industry body Metal Research Association of India (MRAI) opposed the proposal, claiming that the duty could take a severe toll on jobs in the downstream and ancillary industry. The industry body even urged the Indian government to completely eradicate the 2.5 per cent customs duty on aluminium scrap import.

Trade Focus

According to the US Census Bureau and US International Trade Commission, the United States' total scrap exports stood at 1.42 million tonnes during January-October 2018, up about 11.8 per cent from 1.27 million tonnes in the same period of 2017. 

To China, the U.S. exported 28,100 tonnes in October 2018, down 65 per cent from 80,700 tonnes in October 2017. However, month-on-month the volume rose 9 per cent from the September export volume of 25,700 tonnes. 

Germany’s automotive industry generates a large amount of aluminium scrap. Every year, the country exports around 1 million tonnes of scrap and it tends to grow year on year. According to the global export-import data, Germany exported 1.05 million tonnes of aluminium scrap in 2016, which further grew by around 2 per cent in the subsequent year 2017 to 1.07 million tonnes. In 2018, it continued to grow by 8.4 per cent to 1.16 million tonnes.

France is one of the key growth markets in European aluminium industry which grew by 2.4% year on year. The country exports about 400,000 tonnes of aluminium scrap every year. In H1 2018, France was estimated to export 250,073 tonnes of aluminium scrap, compared to 245357 tonnes in the same period of 2017. In H2 2018, the country’s estimated export volume was at 247844 tonnes, while that in H2 2017 was at 243615 tonnes.

Saudi Arabia’s scrap exports also saw a rise in H1 and H2 of 2018. In H1, it recorded a hike from 74388 tonnes in H1 2017 to 102685 tonnes, and in H2 it grew to 104341 tonnes from 78982 tonnes in the corresponding period of 2017.

Conclusion

In short, 2018 was marked by imported tariffs that led to US-China trade war and even shook the two countries’ export-import volumes.