The future of aluminium lies in scrap
International geopolitical tensions are putting pressure on primary aluminium supply chains. The blockade of the Strait of Hormuz is disrupting trade flows from the Persian Gulf region, which accounts for around 9% of global primary aluminium production.
Further complicating the picture are the damages sustained by major Middle Eastern production facilities, such as Aluminium Bahrain and Emirates Global Aluminium, and the gradual tightening of sanctions against Russia, a long-standing supplier of low-emission aluminium to the European market.
The shortfall in this material now exceeds 87% of the continent’s requirements, making it necessary to import around 8 million tonnes of metal annually.
Against this backdrop, the limited availability of raw materials, combined with persistent geopolitical uncertainty, is fuelling a sharp rise in raw material prices, which have risen over the past year from around 2,400 to over 3,500 USD per tonne.
Although the correction at the end of June brought this figure down to around 3,100 USD, the price remains far too high.
The growing difficulty in sourcing primary aluminium increases the strategic value of secondary aluminium, obtained from the recycling of scrap.
Energy dynamics are also further encouraging its use. The production of primary aluminium requires huge amounts of electricity: according to the International Aluminium Institute, an average of around 52 kWh is needed for every kg of primary aluminium derived from bauxite, compared with just over 2 kWh for recycled aluminium.
This gap translates into energy savings of over 95%, as well as a substantial reduction in CO₂ emissions.
However, the scrap market has also become a battleground for international competition. Recent US policies, characterised by the introduction of 50% tariffs on semi-finished aluminium products and 15% tariffs on scrap, create favourable conditions for purchases by non-EU operators.
This is leading to a gradual reduction in availability for the European manufacturing industry and a substantial rise in prices, which in many cases far exceed the benchmark prices set by the London Metal Exchange (LME).
The aim is to highlight the strategic value of scrap aluminium for industrial competitiveness and the sustainable transition of European industry.
This vision now appears to be reflected in the protectionist measures announced by the European Commissioner for Trade and Economic Security, Maroš Šefčovič, which are designed to limit the export of scrap aluminium to non-EU countries and to safeguard its availability within the single market.
Once confirmed, these measures would represent an unprecedented step in European trade policy, supporting the resilience of the supply chain and creating more favourable conditions for investment in the circular economy and the decarbonisation of the sector.
