Recycled Aluminum Market Set for $91 Billion Boom by 2032
- The global aluminum recycling market is forecasted to grow from $57.2 billion to $91.3 billion by 2032 due to industrial demand for low-carbon materials to offset high energy costs and comply with decarbonization goals.
- Major producers like Novelis are investing heavily in expanding recycling capacity, while the automotive industry is solidifying demand through lightweighting mandates for electric vehicles and new regulations like the EU Battery Regulation
- Asia-Pacific currently dominates the market, with China driving significant growth by relying on scrap to meet domestic demand under a primary aluminum production capacity ceiling, reinforcing a long-term bullish outlook for recycled metal.
The global aluminum recycling market is set for a substantial expansion, projected to reach $91.3 billion by 2032, as industrial consumers aggressively pursue low-carbon material sources to mitigate skyrocketing energy costs and meet stringent decarbonization targets.
The forecast, detailed in a new market analysis, highlights a fundamental shift in the global metal supply chain. The recycling market, valued at $57.2 billion in 2024, is expected to expand at a compound annual growth rate (CAGR) of 6.2%.
This growth is structurally linked to the energy-saving advantage of secondary aluminum: production requires approximately 95% less energy than primary smelting.
With primary aluminum prices recently topping a three-year high of nearly $2,900 per tonne, in part due to elevated energy costs for smelters globally, the economic incentive for recycling has never been stronger.
Analysts note that persistently high electricity and natural gas prices in Europe have significantly impacted the operating rates of energy-intensive primary smelters, making recycled metal a strategic cost-saver.
Global Producers Commit Massive Capital to Secure Green Supply
In response to this structural trend, major global producers are committing significant capital to expanding recycling capacity. Novelis Inc., one of the world's largest aluminum recyclers, is investing approximately $90 million to double the capacity for used beverage cans (UBCs) at its Latchford facility in the United Kingdom. This project is expected to increase annual UBC processing by 85 kilotonnes, which the company states will reduce annual carbon dioxide equivalent (CO2e) emissions by more than 350,000 tonnes for its European operations.
This investment is part of Novelis' broader strategy to achieve an average of 75% recycled content across its products by 2030, up from 63% in fiscal year 2024. Novelis is also expanding recycling capabilities in North America and Asia, with CEO Steve Fisher underscoring that the focus on high recycled content directly translates into a low-carbon solution for customers. This move aligns with industry-wide initiatives, including Hydro's recent construction of a 70,000-tonne-per-year aluminum recycling facility in Torija, Spain, designed to support the construction and transportation sectors with low-carbon alloys.
Automakers Drive Demand with Aggressive Lightweighting and EV Targets
The transportation industry, particularly the electric vehicle (EV) segment, has emerged as the most critical application for recycled aluminum. The automotive sector, which already commands the largest share of the recycling market, is projected to maintain its dominance. As automakers strive to improve EV range and performance, the engineering imperative for lightweighting is increasing the average aluminum content in vehicles, which can exceed 400 kilograms per unit for some EVs.
This demand is backed by corporate mandates, such as Ford Motor Company's commitment to utilize a minimum of 20% recycled content in the aluminum components of its F-Series truck production. Furthermore, new regulations are beginning to formalize this trend. Notably, the European Union Battery Regulation 2023/1542 will introduce minimum recycled-content thresholds for battery housings starting in 2027, locking in demand for secondary materials. According to the Aluminum Association, aluminum is the fastest-growing automotive material, with usage expected to reach a record 514 pounds per vehicle by 2026.
China's Production Cap Propels Asia-Pacific Recycling Growth
Geographically, the Asia-Pacific region is the dominant force in the recycling market, accounting for over 41% of the global landscape. China, the largest consumer of aluminum scrap in the region, is significantly shaping the global supply-demand dynamic. With the Chinese government adhering to a firm capacity ceiling of 45 million tonnes for primary aluminum smelting, the country is increasingly relying on scrap and secondary production to meet domestic industrial demand. The nation has set a target to recycle over fifteen million tons of aluminum annually by 2027.
The structural supply tightness, compounded by policy and trade issues like the European Union's impending Carbon Border Adjustment Mechanism (CBAM) set to take effect in 2026, is pressuring producers globally to decarbonize. The use of recycled aluminum, which avoids 95% of associated greenhouse gas emissions, provides an immediate path to compliance and sustainability. The International Aluminium Institute (IAI) projects that global aluminum demand will double by 2050, with more than half of that demand expected to be met by recycled metal, solidifying the market's long-term bullish outlook.
By Michael Kern for Oilprice.com
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