It is of course, well understood and acknowledged that Recycling Aluminium saves more than 90 percent of the energy that would be needed to smelt a comparable amount of the metal from its raw materials. It is estimated that recycling of every Kg of Aluminium saves earth 5Kg of Bauxite, 4 Kgs of Chemical products and nearly 14 units of electrical energy. This saving in inputs plus near ‘zero’ generation of green house gasses in the operation of secondary smelters, more than covers the addition operational expense of scrap collection, sorting, re-melting for casting to provide over 20-25% cost advantage in products produced from recycled aluminium.
Of the current global aluminium consumption levels of around 80-85 million TPA, over 30% or 30-35 million tons comes from recycled aluminium. While primary aluminium, which is produced in just about 30 odd countries on the globe, aluminium is used in some form or the other in virtually every small and big nations on earth. The countries that show significantly higher per capita consumption rate of aluminium over and above the global average of 8 Kg/head per annum do so, on the basis of products they produce and export to other countries. Thus in every other country, Aluminium scrap is generated and re-used after the product goes through its economic life cycle of use. Therefore, unlike primary aluminium, aluminium scrap generation, availability and re-melting for re-cycling is a global industrial activity.
In terms of secondary aluminium smelting capacity China, which now produces over 40 % of Primary Aluminium of the world, also covers 45% of global secondary smelting capacity. In the Asia Pacific region, Japan, Thailand, Hong Kong, Taiwan, South Korea and Malaysia, none of which are primary Aluminium producing countries, contribute to the global secondary aluminium smelting capacity by 42%. These countries, apart from using their indigenously generated aluminium scrap, are major scrap importers from the west. Significantly, of the total volume of scrap aluminium supplied to the global recycling industry by North America, the largest scrap generating region on earth, China alone accounts for over 45% of that volume through raw and processed scrap exports.
The secondary aluminium sector being heavily fragmented across the globe, information and statistics on availability of different types and categories of scrap, recycling capacities and technology status etc. have never been available in an adequately authenticated manner. This obviously created enormous problems in building making projecting on future market supply and demand trends. The growing economic prosperity and consumerism in Asia- Pacific region in recent years has further added to the complexities.
Many new questions have been thrown up in recent times regarding the industry and its future growth pattern. Would Indian sub-continent which today consumed less than 1.5 Kg per head per annum become a major global primary and secondary Aluminium producer and consumer as it approaches the 50% mark 4 Kg/per head/per annum of global average? Would Gulf region which is emerging as the fastest growing primary and downstream product producing region on earth become a major playground for the global scrap handling, processing and utilising region in coming years? Would the growing prosperity in the Asia- pacific region make it also a significant generator and supplier of scrap to the global secondary Aluminium industry? And of course, the pattern of technological up- gradations that would be needed to accommodate the significant changes that are likely to emerge with changing quantitative and qualitative scrap availability across the globe.
The above are some of the issues that need to be discussed and debated by experts in the secondary aluminium sector to enable investors interested in the industry to decide upon location, sizing and investing pattern in the future of the industry.