Market Trends of Aluminum Recycling Industry
Increasing Demand from the Automotive Industry
- Recycled aluminum serves its purpose in various industries, such as building and construction, packaging, automotive, and many more, owing to its low energy consumption and reduced carbon emissions.
- Recycling aluminum consumes roughly 90% less energy than producing virgin aluminum from raw ore and reduces CO2 emissions by up to 26%. Because it is widely available from crushed vehicles, old beverage containers, and other goods, scrap aluminum is usually 20-30% cheaper.
- Due to significant cost savings over the production of new aluminum, recycled aluminum is heavily used in the growing automotive industry at a very large scale. According to the Organization Internationale des Constructeurs d'Automobiles (OICA), the total number of new automobile sales or registrations in the OICA member countries was close to 69 million units in 2022.
- Aside from that, OICA stated in its annual statistics that 85 million automobiles were expected to be produced in 2022, a 6% increase over the previous year's total production. Cars accounted for the lion's share of total production (71%), with commercial vehicles accounting for the remaining 29%.
- Furthermore, the Society of Motor Manufacturers and Traders predicted that over 775,000 cars were manufactured in the United Kingdom in 2022. Aside from that, in January 2023, approximately 68,600 automobiles were manufactured in the United Kingdom.
- As per the World Economic Forum (WEF), nearly 4.3 million new battery-powered EVs (BEVs) and plug-in hybrid electric vehicles (PHEVs) were sold globally in the first half of 2022. Additionally, BEV sales grew by around 75% on the year and PHEVs by 37%. Moreover, global electric car sales crossed the 5.7 million unit mark in the first eight months of 2022, and the market share of plug-in electric cars also increased by nearly 15%.
- These rising numbers of vehicle production and the increasing usage of recycled aluminum in electric vehicles due to their numerous advantages are driving the demand for recycled aluminum forward.
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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 automotive, electronics, building and construction, aerospace and defense, etc., are growing in countries such as China, India, and Japan, among others.
- According to the International Aluminum Institute, China was the leading market for recycled aluminum production in 2021, recycling approximately 12,771 metric kilotons of aluminum in that year.
- China has been the largest and most dominant nation in terms of vehicle production and sales of all types. In 2022, automotive production in the country reached 27.02 million units, which increased by approximately 3.4%, compared to 26.08 million vehicles produced in 2021, as stated by the China Association of Automobile Manufacturers.
- Furthermore, the overall production of new energy vehicles in China in 2022 was estimated to be around 7 million units. When compared to vehicle manufacturing in 2021, this represented a whopping 97% increase (3.54 million units). In the first two months of 2023, the country produced about one million new energy vehicles, representing an 18% increase over the same time during the previous year.
- For a few years, India has been working on the country's electric vehicle sector. According to a Centre for Energy Finance (CEEW) report, India has a USD 206 billion opportunity for electric vehicles by 2030, which will demand a USD 180 billion investment in vehicle manufacturing and charging infrastructure.
- Furthermore, the Packaging Industry Association of India (PIAI) predicts that the Indian packaging sector will develop at a rate of 22% throughout the forecast period. Furthermore, the Indian packaging industry is predicted to reach USD 204.81 billion by 2025, growing at a CAGR of 26.7% between now and then.
- Moreover, the Indian electronics market is expected to reach USD 400 billion by 2025. Additionally, India is expected to become the fifth-largest consumer electronics and appliances industry in the world by 2025, as stated by the India Brand Equity Foundation (IBEF).
- Hence, with the rapidly growing end-user industries in countries of the Asia-Pacific region, the region is expected to dominate the global market during the forecast period.
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