Scrap exports hamper downstream industry in Middle East: Frost & Sullivan

Secondary aluminium production and the downstream industry in the Middle East are being limited by large-scale export of aluminium scrap, a result of relatively low downstream activity, according to delegates at Metal Bulletin’s 21st recycled aluminium conference in Dubai.

“Major recyclers [in the Middle East] mostly look at export opportunities so downstream players are left with limited sources of scrap in the region,” Subramanian Venkatesan, vp of metals and minerals at Frost & Sullivan, said at the conference.

The Middle East exports about 80% of its end-of-life scrap, Venkatesan said.

Additionally, most aluminium shelters in the region are not set up to maximise the usage of recycled metal or to retain value in their own waste products.

“Smelters do not have the latest technology furnaces for dross recycling,” Venkatesan said. Dross recycling levels in the region will rise over the coming years as aluminium smelter output and downstream industry capacity increase.

In 2012, the region produced about 71,000 tonnes of dross and recovered about 25,000 tonnes.

By 2018, when smelter output in the region will reach 7 million tpy from 4 million tpy in 2012, Venkatesan says dross production will reach more than 150,000 tpy and dross recovery will reach 60,000 tpy.

“Dross recycling will get a major boost from smelters ramping up and an increase in downstream re-melt facilities,” Venkatesan said.

A swiftly developing downstream industry will also see a higher proportion of scrap staying in the region, adding to the tightness in scrap metal expected in other markets.