Aluminium recycling in China set to maintain growth curve

China’s recycled aluminium industry developed relatively late, taking shape in the late 1970s. In the 1990s, with the entry of foreign capital into this industry, Chinese imports of scrap aluminium and exports of recycled aluminium continued to increase, and many small aluminium recycling plants were established. From 2000 to 2010, the recycled aluminium market expanded rapidly and a new batch of medium and large-scale enterprises emerged in coastal areas, with such enterprises beginning to tap into the domestic aluminium scrap supply system.

Statistics show that the scale of domestic recyclable aluminium scrap has increased steadily over the last 20 years. After melting and regeneration, applications for the recycled aluminium can be divided roughly into aluminium castings (die-casting aluminium alloys), recycled aluminium rod and plate, strip and foil (grade-guaranteed aluminium alloys). In 2019, around 70% of domestic scrap aluminium regeneration went into die-casting aluminium alloys and the remaining 30% into deformed aluminium alloys. As for end use, around 80% was used as aluminium castings, 15% of generated aluminium rods were used as profiles, and the remaining 5% flowed to plate, strip and foil. From this it can be inferred that the grade-protected utilization proportion was less than 10%.

The following three points can be made about recycled aluminium growth: first, the contribution of “urban mining” to the increase in scrap aluminium; second, high aluminium prices and policy guidance have driven improvement in scrap aluminium recovery channels; and third, with the upgrading of technology and a higher proportion of large-scale recovery capacity, the yield of various types of scrap aluminium models has increased, as has the proportion of guaranteed grade utilization.

By the end of 2019, domestic scrap aluminium accumulation had reached 340 million tons. At present, around 42.2% of this is retained in building profiles; 22.2% in industrial profiles; 12.3% and 1.6% in plate/strip and foil, respectively; 5.8% in wire and cable materials; 13.6% in die-castings as a whole; and 2.2% for the rest.

It is estimated that, by 2025, the total amount of domestic scrap aluminium will reach 11.77 million tons, giving a growth rate of 13.8% between 2020 and 2025. The scrap cycle of plate, strip and foil is relatively short and this proportion is expected to grow from 43.3% in 2020 to 44.3% in 2025. It is anticipated that the total volume of aluminium scrap with grade protection and utilization potential will climb to 5.22 million tons by 2025.

It has been calculated that, from 2010 to 2019, the domestic scrap aluminium recovery rate increased from 70.3% to 76.4%, giving annual average growth of 0.7%. As part of this, the overall domestic recovery rates for aluminium construction and automotive scrap can exceed 90%. At the same time, there is a continuing increase in the recovery rate for deformable materials such as cans; by 2019, the recovery rate for scrap cans was nearly 100%.

Considering that the price of aluminium scrap is above Yuan 10,000 per ton, the social recovery rate is expected to continue to increase along with the trend towards continuous improvement of the recovery market. If the overall scrap aluminium recovery rate maintains its steady 0.7% annual growth over the next five years, then it would reach 80.7% by 2025 to give a corresponding recovery volume of 9.5 million tons. With further centralization of the scale of aluminium scrap recycling enterprises in the future, this will provide the foundation for continuous improvement in the overall recycling level.

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