Market Trends of Aluminum Recycling Industry
Increasing Demand from the Building and Construction Industry
- Aluminum is the second most widely used metal in the building and construction industry. Around 60% of the aluminum used in the buildings consists of recycled material.
- Recycled aluminum casting alloys, extruded sheets, and other products were used in floating ceilings, windows, doors, stairs, wall panels, roof sheets, and a variety of other applications.
- The use of recycled aluminum also offers substantial energy benefits. Remelting used aluminum requires only 5 percent of the energy needed to produce primary metal. Thus, rather than contributing to society’s growing waste problem, aluminum can be remelted and reformed to produce a new generation of building parts.
- Secondary aluminum/recycled aluminum products are extensively used in building facades, curtain walls, roofing and cladding, solar shading, solar panels, railings, staircases, shelves, and other temporary structures. They are also used in the construction of high-rise buildings, skyscrapers, and bridges.
- According to the Oxford Economics report, global construction output is expected to grow the most in the Asia-Pacific region by around 40% by 2030, followed by the North American region by nearly 16%.
- Increasing construction activity worldwide is one of the key factors driving the market studied in recent times. Asia-Pacific, North America, and the Middle East, among others, are witnessing a positive growth rate in the building and construction industry. Hence, the demand for the recycling aluminum market is likely to increase over the forecast period.
- In Asia-Pacific, China is amid a construction mega-boom. Globally, China has the most significant building market, making up around 20% of all construction investments across the world. The country alone is likely to spend about USD 13 trillion on buildings by 2030.
- The construction industry is the second-largest in India. It grew at 10.7% in 2022. By the end of the forecast period, India’s construction industry may emerge as the third-largest market across the world, with a size of around USD 1 trillion.
- As per the Canadian Construction Association data, the construction sector is one of largest employers in Canada and a significant contributor to the country’s economic success. The industry contributes to 7% of the country’s GDP.
- As part of the ‘Investing in Canada Plan,’ the Canadian government has announced plans to invest around USD 140 billion for significant infrastructure developments in the country by 2028. In 2019-20, the government plans to approve investments valuing USD 5.6 billion for new infrastructure projects in the country.
- The announcement of Vision 2030 and the National Transformation Plan (NTP) in Saudi Arabia have increased investments in different sectors, such as education and healthcare, to support the economic growth of the country. The government has expansive plans for the development of social infrastructure in the country. Government and private investments in various sectors of the country are likely to lead to a rise in commercial building construction activities.
- Therefore, owing to the factors mentioned above, the demand for recycled aluminum will be positively impacted during the forecasted period.
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Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region is expected to be the largest growing market for recycled aluminum during the forecast period. Industries such as electronics, automotive, building and construction, aerospace and defense, etc., are growing in countries such as China, India, and Japan, among others.
- China has been recycling aluminum domestically since the 1970s. Additionally, It has increased its focus on secondary Aluminum in recent years. In this regard, It is planning to cap the primary aluminum smelting capacity at around 45 million tons by 2030.
- As per the International Trade Administration (ITA) data, China remains the largest auto market globally in annual sales and production. Domestic production is anticipated to reach nearly 35 million units by 2025. The Chinese government is boosting car consumption following the COVID-19 pandemic. China accounts for over half (58%) of all new electric vehicles sold worldwide. According to the International Energy Agency (IEA), 5.9 million new electric cars will be sold nationwide in 2022, an increase of more than 80% compared to 2021.
- According to the report of the International Trade Organization, China is the largest construction market across the world and has the highest rate of urbanization globally. According to data from the American Institute of Architects (AIA) Shanghai, by 2025, China will have built a city equivalent to 10 in New York since the 1990s.
- According to the Indian Brand Equity Foundation (IBEF), the civil aviation industry has become one of India's fastest-growing industries in recent years. The aviation industry in India is expected to be affected by the new coronavirus, as can be seen from the fact that the air traffic volume in 2023 (April to December 2022) was 236.71 million, compared to 131.61 million in the same period of the previous year. Furthermore, In June 2023, the Indian company Air India signed agreements with Airbus and Boeing to purchase 470 planes for an estimated cost of USD 70 billion.
- The consumer electronics industry in Japan is one of the world's leading industries. The country is a world leader in producing computers, gaming stations, cell phones, and other vital components. Further, consumer electronics account for around one-third of the Japanese economic output. Japan's overall electronics production has declined due to stiff competition from countries such as India, China, and South Korea.
- According to the Japanese Electronics and Information Technology Industries (JEITA), the production value of consumer electronic equipment in the country stood at JPY 23,425 million (USD 165 million) in January 2023, increasing by a significant 79.8% during the same period last year. Meanwhile, the production value of electronic devices stood at JPY 290,309 million (USD 2,042 million) in January 2023, increasing by 89.6% annually.
- Thus, the factors above will likely affect the market demand studied during the forecast period.
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