The “Spotlight on Aluminium Recycling” segment of the MRAI conference ensured an overall appraisal of the scope of the current and the impending expansions of secondary aluminium sectors across the nation of India. The segment saw the congregation of key industry constituents of the aluminium sector, including recyclers, OEMs, scrap importers, automotive groups, and packers, to discuss aspects of market fluctuations, scrap issues, and demand increments.
The session featured distinguished industry leaders including Mr. Abhimanyu Prakash, CEO, AL Circle; Mr. Ashish Kumar Katiyar, General Manager, Honda Motorcycle & Scooter India Pvt. Ltd.; and Mr. Manish Joshi, Regional Commercial Director, Ball Beverage Packaging India Pvt. Ltd. The discussion was moderated by Mr. Dhawal Shah, Senior Vice President, MRAI, with insights from Mr. Jayant Jain, Managing Director, GR Metalloys Pvt. Ltd., representing the secondary aluminium manufacturing sector.
Opening Remarks: Market Volatility and Structural Pressures
Opening the session, Mr. Dhaval Shah framed aluminium as a metal in structural shift-from being traditionally a stable commodity to one that would increasingly be shaped by geopolitical and policy-driven volatility.
Speaking about the recent price performance, he said that aluminium prices at the LME moved from close to USD 2,450 per tonne at the beginning of 2023 to nearly USD 3,200 per tonne, thus returning close to 30% in a year's period. This was after jumping to USD 3,800 per tonne last March 2022, or shortly after the outbreak of the Russia–Ukraine conflict, and then sliding to around USD 2,100 per tonne.
“Normally aluminium is known for its resilience and long cyclical moves, but today it has become as hot, active, and volatile as any of its peer metals,” Mr. Shah observed.
He listed several world parameters that affect aluminium markets, among them production limits in China, stock levels in LME warehouses, energy supplies, and fluctuating geopolitics.
Mr. Shah, while narrating from an Indian point of view, highlighted the significance of the recycling industry, where the recycling industry figures have 40percent of the total aluminium output from India itself, while, as a drawback, the recycling industry faces a crisis of existing raw materials, competition in prices from Southeast Asia, etc.
“The application of import duty on aluminium scrap is stealing the competitiveness of our industry,” he stated, adding that duties on recycled raw materials are counterproductive when most economies are actively facilitating scrap flows.
He also cautioned that ongoing negotiations regarding an EU proposal to develop a Waste Shipment Regulation (WSR), an EU Steel and Metals Action Plan (SMAP), and an EU Critical Raw Materials Act (CRMA) could result in limiting scrap supplies available to non-OECD nations like India.
Global Secondary Aluminium Industry Outlook and Capacity Expansions
In providing a macroeconomic backdrop, Mr. Abhimanyu Prakash, CEO, AL Circle, put India’s issues into perspective through a discussion on global aluminium consumption trends.
In 2024, worldwide consumption of aluminium stood at more than 104 million tonnes, of which 74 million tonnes were primary aluminium and 30 million tonnes of aluminium were in the form of secondary aluminium. The consumption of secondary aluminium can be raised further to 31.1 million tonnes by 2026.
China maintains its position as the leading consumer of aluminium materials worldwide with an overall share of 45%, followed by the rest of Asia Pacific.
The mature countries of Europe and America show incremental growth due to their stable economies and high level of recycling.
In the last five years or so, 22 million tonnes of new secondary aluminium capability have been built worldwide. Of this total, nearly 15 million tonnes are in China, with the remainder in the North American region at 3 million tonnes, Asia Pacific (excluding China) at 1.9 million tonnes, and Europe at 1.3 million tonnes. However, Mr. Prakash pointed out that most of the secondary capability in Europe was not in use due to a lack of scrap materials.
“What is driving prices, trades, and investments today is not capacity, it is scrap availability,” he emphasized.
The major sectors where these products are being consumed include 50% share in secondary aluminium consumption through the automobile industry, followed by packaging, like can stock, amounting to 17%.
Scrap Trade Flows and India’s Import Reliance
The exports of global aluminium scrap from January to October 2023 were recorded to be around 10 million tonnes, with the United States dominating the list as the top aluminium scrap-exporting country, followed by Germany, the Middle East, Thailand, and Canada.
Emerging as aggregation/transshipment hubs, Thailand/Middle East countries are enabling the strong growth in the remelting capacity in Asia. Conversely, the export from the European region has either stabilized or decreased with the local consumption of scrap materials under the strengthening local regulations.
India has turned out to be a large receptor nation with regard to global scrap flow. From August to September 2023, India turned out to be the largest global importer concerning aluminium scrap. A list of key nations that were major aluminium scrap suppliers includes the UK, USA, Saudi Arabia, UAE, and Australia. Over the past ten years, the aluminium scrap imports received by India have almost doubled.
India's per capita aluminium consumption currently stands at merely 3.9 kg and will increase to 7.29 kg by 2035, compared to the average consumption level of the world as a whole.
Concurrently, India's production of aluminium will increase to 6 million tons of primary aluminium and 5.4 million tons of secondary aluminium by 2035.
Automotive Sector: Core Driver of Secondary Aluminium Demand
The automotive sector was identified to be the backbone for secondary aluminium consumption patterns in India. Mr. Ashish Kumar Kataria, a General Manager at Honda Motorcycle & Scooter India Private Limited, presented an overview on the large-scale automotive sector and its sustainable green growth path.
India reports 23.18 million two-wheeler sales each year, valued at 29 billion USD. India reports 6.11 million four-wheeler sales each year, valued at 95 billion USD. The contribution of the automobile sector is 7.1 percent of India's total GDP and 49 percent of India's total manufacturing GDP.
The demand for secondary aluminium in India is predicted to rise by an approximate 90% level in 2030 with regard to the 59% of present secondary aluminium demand met by the automobile industry.
“Secondary aluminium is not only an environmental necessity; it is becoming a strategic input for the automotive industry,” Mr. Kataria stated.
He pointed out that second aluminium can save up to 95% of the energy costs and reduce carbon emissions by 75%, compared to primary aluminium, with the additional advantages of more robust global supply chains. HMSI renewed its focus on the environment with the objective of becoming carbon neutral by the year 2050 with increased localization, recycled contents, and investments of Rs. 600 crores towards the setting up of dedicated EV manufacturing facilities, with ambitions to hit the production of 1 million EVs every year by 2030 itself.
Packaging and Beverage Cans: Circularity in Action
Addressing aluminium packaging, Mr. Manish Joshi, Regional Commercial Director (Asia) at Ball Beverage Packaging, described aluminium beverage cans as one of the most established examples of circularity.
Global beverage packaging is growing at 5.5% annually, with Asia exceeding 6%, while India’s aluminium can market is expected to grow at over 10% CAGR through 2030.
“Aluminium beverage cans are increasingly seen as the packaging of the future due to their infinite recyclability and low carbon footprint,” Mr. Joshi noted.
Further, the use of aluminium cans results in 95% energy saving, recycling rates of up to 98.5%, and optimal logistical advantages due to the possibility of deriving 20 truckloads of crushed cans out of one truckload of loose cans. In the case of EPR, aluminium cans for beverage use already contain 69% recycled material.
During this session, research done concerning consumers revealed that about 84% of consumers were willing to change their behavior with regard to moving towards sustainable packaging, with India having some of the highest consumers willing to pay for sustainability in the world.
Panel Discussion: Policy, Trade, and Strategic Alignment
The major topic covered during the panel discussion was the gap between policy commitments and scrap materials. During the discussion, speakers at the panel discussion accepted the mandate for India in terms of ensuring a certain percentage for recycling, up to 10% in the next 6-7 years, and recognized it to be a good opportunity.
Mr. Prakash went on to explain that while the value of recycled material is recognized by the country, calibration needs to take into account the country’s own scrap constraints. Moreover, the global scrap material is becoming increasingly localized.
The Carbon Border Adjustment Mechanism, abbreviated as CBAM, has also been discussed as a primary driver of secondary aluminium use as an increase in scrap material reduces carbon borders, which act as a customs tax on exports going into the EU. Global traders, however, have indicated that strict export policies, as emphasized in the WSR as well as similar rules, could further tighten the markets, creating greater rivalry for the materials.
“Free trade in recycled materials is essential for the health of the global recycling ecosystem,” Mr. Anthony Marshall stated, adding that while regional restrictions may offer short-term benefits, they risk long-term inefficiencies.
OEM perspectives were focused on cost absorption and supplier collaboration. Mr Kataria pointed out that even though greener materials can lead to a cost increase in the first instance, efficiency gains, localisation and value engineering will be crucial to long-term affordability.
The packaging stakeholders emphasized that from downcycling to true closed-loop recycling, there was a pressing need for transitioning in the case of UBCs also with improved collection systems and articulation through coherent industrial action.
Overview
The highpoint of "Spotlight on Aluminium Recycling" session, in conclusion, stated that secondary aluminium is no more a supplementary material; it has turned to be a strategic pillar for both industrial and decarbonisation roadmap for India. While India has the technology, capital, and manufacturing capability to scale up the production of secondary aluminium, scrap availability, trade policy alignment, and ecosystem development remain crucial factors.
This session emphasized that to make sure India's demand for aluminium is met through resilient and sustainable supply chains, major policy reforms should take place, scrap import duties must be removed, EPR frameworks need to be realistic, and continuous investment in advanced recycling technologies.
(Iruniverse Rohini Basunde)
