Recap 2019: How new initiatives and tariffs moved aluminium recycling industry in 2019

The year 2019 saw the announcement of new campaigns and initiatives to encourage and raise awareness for aluminium recycling among consumers. New schemes have been launched in an effort to meet sustainability targets. Showa Denko Group collected about 4.79 million UBC for recycling or recovered about 75 tonnes of aluminium when converted at the rate of 15.7 grams of aluminium per can.  The significance of recycling is growing because of the increased focus on sustainably produced aluminium.

Emirates Environmental Group (EEG) rallied 200 entities to collect 5267 kg of aluminium cans for recycling in the recent 23rd edition of the Can Collection Day. EEG achieved 77.8 per cent of the target and therefore urged all sectors to achieve the set target of 20,000 kg till December.

Let’s take a look at the aluminium recycling highlights of the year:

Aluminium recycling rates in the US and UK

A report from the Aluminium Association and the Can Manufacturers Institute (CMI) showed that aluminium cans outperformed other competitive packaging types and materials based on several sustainability metrics. The report - “The Aluminium Can Advantage: Key Sustainability Performance Indicators 2019” revealed that aluminium cans were recycled nearly double the rate of glass or plastic bottles. The recycling rates of aluminium cans stood at 49.8 per cent. The average recycled content for an aluminium can produced also rose from 70 per cent to 73 per cent in the United States, compared to 23 percent for glass and 3 percent for plastic.

Environment Agency UK reported that a little less than 30,000 tonnes of aluminium packaging was recycled in Q3 2019. Packaging recycling rate was up 6% in the full year 2018. These numbers indicate that aluminium will hit its annual target of 108,919 tonnes of recycling in UK. In order to boost recycling data, Alupro urged the government to make short-term changes to the Packaging Recovery Note (PRN) system, pending the reform of producer responsibility system.

Trade focus:

Aluminium scrap imports in India

The slowdown in the automobile sector in India could not resist the rise in aluminium scrap imports during April-September of the financial year 2019-20. As per the data submitted to the Ministry of Finance, citing figures from the Society of Indian Automobile Manufacturers (SIAM), the imports rose by 6.5 per cent, while the Indian auto sector’s production tumbled 13 per cent.

The Aluminium Association of India (AAI) feels the benign import duty of 2.5 per cent on scrap is unable to restrict inbound shipments. Meanwhile, domestic primary aluminium producers are confronting high duty differential between primary and scrap. Compared with a duty of 7.5 per cent plus premium over LME prices on primary aluminium, scrap attracts a mild duty of 2.5 per cent.

Aluminium scrap exports from US to China

The United States Geological Survey found exports of aluminium scrap from the US to China stood at 19,600 tonnes in September, down 26 per cent month-on-month. Year-on-year, the US aluminium scrap exports to China stood lower by 23.73 per cent in September 2019 from 25,700 tonnes.

In the total nine months of the year, China secured 300,000 tonnes of aluminium scrap from the US, down 24.05 per cent from 395,000 tonnes during the same period last year.

China is tightening restrictions on imports of scrap metal to adhere to an environmental campaign against foreign solid waste. China announced that it would impose an extra 5% tariff on imports of copper scrap and aluminium scrap from the United States from Dec. 15, 2019. Beijing had already levied a 25% tariff on U.S. aluminium scrap twice in 2018 leading to a total import tariff of 50%.

China’s imports of aluminium scrap are expected to fall 16% year-on-year to 1.31 million tonnes in 2019.

Secondary aluminium recovery and consumption in the US

According to the latest report from United States Geological Survey for aluminium, total aluminium recovered from scrap (recovery from purchased, tolled, or imported scrap) in September 2019 stood at 284,000 tonne, slightly less than the amount in August 2019.

Of this, 159,000 tonnes of aluminium were recovered from new scrap and 125,000 tonnes were recovered from old scrap. For the first nine months of 2019, total aluminium recovery from scrap stood at about 2.56 million tonnes, down 8.5% YoY. Aluminium recovered from scrap or recycled aluminium accounted for 39% of total aluminium supply in the U.S. during the period from January to September 2019.

Significant growth in the use of aluminium in transport and packaging industries in the US has resulted in the increasing availability of aluminium scrap and thereby, encouraging recyclers to expand their capacity. Those who are already expanding include Novelis, Matalco, and JW Aluminium.

Jorge Vasquez, founder of consultancy Harbor Aluminium, also said, “Scrap prices are heavily discounted because availability has outpaced capacity and because tariffs exempt scrap.” The demand and use of aluminium are estimated to grow further in drinks firms and electric vehicles manufacturers, resulting in the growth in generating scrap.

Total aluminium consumption in the United States this year is estimated to be more than 10 million tonnes, nearly 15% of the global total at 67 million tonnes.

Aluminium scraps import quotas in China

China in December issued a fresh batch of import quotas for aluminium scrap for 2019, with the quota volume declining sharply as expected. The China Solid Waste and Chemicals Management Bureau, a unit of the Ministry of Ecology and Environment, issued import quotas for another 9,844 tonnes of aluminium scrap. The latest batch of quotas was allocated to 15 companies, which have obtained 13,834 tonnes of import quotas for the fourth quarter, down 70.52% from 46,930 tonnes from Q319.

China granted three batches of import quotas of a cumulative total of 68,549 tonnes for aluminium scrap for Q4, down 83.09% from 405,416 tonnes in all the four batches of quotas for Q319.

Data from China customs showed that about 459,000 tonnes of foreign aluminium scrap was imported into China in July to October, after restrictions on imports of Category 6 metal scrap came into force on July 1.

Announcement of new schemes and initiatives:

• The Scottish government announced a new Deposit Return Scheme (DRS) that will include aluminium and steel cans, and drink containers made of glass and PET plastic.
• Novelis partnered with 2019 Kentucky Derby for "Recycle for Good" campaign.  Aluminium cans and bottles collected during the Derby will be recycled at Novelis' facility in Berea, Kentucky.
• Jaguar Land Rover launched a new aluminium recycling scheme, in a bid to reduce material wastage that comes from scrapping cars and minimise CO2 emissions throughout its entire production process.
• Pennsylvania lawmakers are aiming to pass a bill to start a bottle and can deposit program in Pennsylvania. The legislation would allow residents to receive 5 cents for each of the used cans and bottles they deposit. 
• In association with Coca-Cola, Russian food retailer X5 Group will reportedly test reverse vending machines in Pyaterochka stores in Moscow, aiming to collect and recycle used plastic bottles and aluminium beverage cans of different brands.  

News on aluminium coffee capsules:

• Nespresso issued an invitation urging portioned coffee manufacturers to join its recycling programme that aims to improve the accessibility and convenience of aluminium capsule recycling.
• Nespresso launched a stylish city bike, named “RE:CYCLE”, from recycled aluminium coffee capsules in association with Swedish lifestyle bike brand Vélosophy.
• Dutch beverage brand Jacobs Douwe Egberts (JDE) stepped forward and formed an alliance with Nespresso for recycling aluminium coffee capsules in France.
• Nespresso, in collaboration with New York City’s curbside recycling programme, made a US$1.2 million commitment to enable better recovery of its aluminium coffee capsules. Nespresso believes that its collaboration with the New York City Department of Sanitation (DSNY), and Sims Municipal Recycling (SMR) will drive its recycling efforts.
• Nespresso and Caran d’Ache’s successful partnership launched a second limited edition of ballpoint pen made from Nespresso's recycled aluminium coffee capsules.

Other major highlights of the year:

• REAL ALLOY Europe joined Aluminium Stewardship Initiative (ASI) as a Production & Transformation member.
• The European Union is likely to collaborate with Jawaharlal Nehru Aluminium Research Development and Design Centre (JNARDDC) for working together on the management of aluminium waste.
• Japan to make 2020 Olympic torches from recycled aluminium platesJapan is promoting sustainability in a big way in 2020 Olympic Games in Tokyo.
• Matalco’s US$80 million aluminium recycling plant in Wisconsin Rapids got preliminary approval from the city's Finance and Property Committee for the project.
• Leicester City Council teamed up with Alupro to help residents recycle more of their aluminium foil trays and wrapping foil. Alupro runs the “Foil in Love with Recycling” campaign to help the aluminium packaging industry achieve and exceed recycling rates, a current set for 64 per cent by 2020.

source https://www.alcircle.com/news/recap-2019-how-new-initiatives-and-tariffs-moved-aluminium-recycling-industry-in-2019-49708