Recycled metal is set to drive a significant increase in aluminum supply as the industry faces mounting pressure to decarbonize. Over the next five years, 22 million tons of annual aluminum capacity from scrap will be added globally. China will contribute about 15 million tons to this new capacity.

Aluminum prices have surged 11% this year, incentivizing recyclers to seek more scrap. Primary aluminum smelters have struggled with energy and raw material costs while under pressure to reduce emissions.

In the US, recycled aluminum will account for two-thirds of unwrought supply by 2026. Major industry players like Rio Tinto and Norsk Hydro are investing in the scrap market to meet customer demands for lower carbon footprints.

Recycling aluminum is more cost-effective and energy-efficient than primary production, though challenges remain in collecting and processing scrap.