India: Draft aluminium scrap policy to be finalized in 6 months

The session on aluminium at the "Institute of Scrap Recycling Industries (ISRI) 2023 Convention & Exposition (ISRI2023)" highlighted investments in the North American aluminium value chain and prospective effects on trade in aluminium scrap between the United States and India, as per an Alcircle report.

According to Dhawal Shah, Managing Director of Metco Ventures LLC, while US aluminum producers are embracing scrap, India's regulators are making it difficult to do so. Despite this, India has significantly increased its aluminum scrap imports from the US, with over half a million tonnes from April 2022 to January 2023. This is due to India's massive secondary aluminum sector, which produces 3.6 million passenger cars yearly and is growing due to increased EV production.

The Bureau of Indian Standards is currently working on finalizing standards for aluminum scrap, with a draft expected to be completed within three to six months from mid-April. The Material Recycling Association of India (MRAI) is in daily discussions with the developers and hopes that the standards will not hinder the industry's growth or limit the industry's supply. According to Shah, it is essential that these standards do not take India backward, and they are working towards ensuring that.

Steve Williamson, North America Research Manager at the CRU Group, said: "The aluminum industry is undergoing unprecedented investments and continues to evolve, change, and grow. However, the market is currently in a precarious balance as of mid-April, which is neither good nor bad news, but simply where things stand at the moment."

He further added, secondary aluminum demand peaked from 2020 to mid-2022, causing some customers to overbuy due to limited supply. However, as of Q2 2023, some customers are still struggling with inventory surpluses, as strong inflationary headwinds have lowered aluminum demand.

Despite the last new aluminum rolling mill being built in the US in 1985, recent significant investments have been made by Novelis, Steel Dynamics, and Manna Capital Partners, which integrate recycling and remelt centres as core investments. However, the excitement around these announcements has been tempered by the current reality.

The 2 million tonnes (mnt) of additional rolling capacity expected to come online could result in scrap flow adjustments. The new capacity is located further south and southwest than before, so some scrap previously routed to the Midwest will be diverted to Texas and the Southeast in the US. The increased capacity may also create a 437,000-t surplus of used beverage cans.

According to Sortera Alloys' VP of Commercialization, Ben Pope, mixed aluminium compounds containing wrought aluminum represent the largest untapped aluminum pile globally. With up to 10 billion pounds of these grades possibly produced annually, wrought aluminum makes up 40% of the scrap in these combined metals.

Note: This article has been published in accordance with an article exchange agreement between Alcircle and SteelMint.