Rising demand for green aluminum is forcing the North American recycling industry into new collaborations and partnerships, industry leaders said on a Jan. 27 panel discussion at the S&P Global Aluminum Symposium.
The growth in demand for environmentally friendly aluminum across various sectors, such as automotive and beverage packaging, has created shortages in scrap aluminum. Recyclers struggled to source aluminum amid a low aluminum recycling rate in the US, and they need to improve the sorting technology to find the right alloys. The industry hopes partnerships can overcome these obstacles.
"We have to get creative because demand is coming online and nothing's changing on the supply side. So, I think you have to turn every stone over and try everything you can," Michael Hamm, North American strategy manager for Maryland recycler Constellium, said on the panel. "Beyond just finding new technology, the industry will have to work together to solve this."
During a presentation at the conference centered on global aluminum supply and demand, Karen Norton, principal aluminum analyst at S&P Global Commodity Insights, said the global aluminum market is forecast to transition into a 123,000-mt deficit in 2026, with this increasing to 415,000 mt in 2027 and rising to a 887,000-mt deficit in 2029.
"The primary side is not growing as rapidly as demand, so scrap will be important to fill that gap," said Ben Pope, senior vice president of operations and commercialization at Sortera, a metal sorter company.
For companies that sell recycled aluminum directly to end-users like the auto industry, finding sufficient sources of scrap supply has been a persistent challenge.
"When we go into a lot of our auto original equipment manufacturers, and a lot of the other auto scrap opportunities, we need partners. We can't do it alone," Gary Tucci, senior director of metal operations at Novelis, said in the discussion. "We're going to have to consume dirtier scrap aluminum, and different types of scraps. And this will require different types of partnerships."
Adding to the complexity of the problem are the several different kinds of alloys that are used for different aluminum products. Panelists at the conference said that sorting through these alloys in the recycling process and then ultimately reproducing the alloys that are in demand has been a major constraint on the supply side.
"A key component that's lacking in the industry is sorting technology. The big players in the room want to know that I can feed them 500 million pounds a year. If one plant's doing 120 million pounds and only 40% of that is the product they want, I have to build quite a few plants to meet demand," said Pope.
"I think partnering is the keyword. As long as people downstream want those units, they can help encourage the technology to come online. Sortera is very open to partnerships regionally because we know we can't do it all by ourselves."
Collaborations of the sort Pope mentioned have already started to come to fruition. Norway-based aluminum producer Norsk Hydro and Michigan-based industrial recycling company PADNOS entered a joint venture in November 2023, and their advanced sorting machines came online in September 2024.
"Our joint venture with Hydro is a perfect example of two companies joining forces in the scrap industry," Sam Padnos, manager of nonferrous trading at PADNOS, told S&P Global Commodity Insights. "Our core competency is sourcing and processing, making raw material for various inputs. Hydro is very good at the technology piece. So that's helpful to really boost our technology further and continue to advance."
