Secondary Aluminum Alloy Market Trends
Growth Drivers
- Increasing Demand in the Automobile Industry –The growing emphasis on decreasing vehicle weight, enhancing fuel efficiency, and minimizing carbon emissions is likely to increase demand for secondary aluminum alloys in the automotive industry in the future years. For instance, in 2022, BMW, a German manufacturer of luxury vehicles, announced to use alloy-cast wheels using secondary aluminum.
- Growing Demand for a Green and Safe Environment – Secondary aluminum alloys are manufactured from repurposed aluminum, resulting in improvements in waste reduction and resource conservation. Moreover, major companies have also started adopting secondary aluminum in order to contribute to reducing greenhouse gases and creating a better environment. According to the Aluminum Association, there is a 10% rise in aluminum end-of-life recycling rates, which cuts greenhouse gas emissions in the industry by 15%.
- Growing Age of Airplanes- The active global commercial fleet now stands at 25,368 aircraft, with a 3.4% net annual increase predicted over the next ten years that will increase the total to 35,501. Moreover, the average lifespan of the active fleet will have reduced from 11.2 to 9.7 years by 2027. Over 20,400 new aircraft will be added as a replacement for 50% of existing aircraft. Aluminum is the primary composite material of the aircraft; therefore, a higher replacement will lead to demand for more secondary aluminum alloys.
Challenges
- Heavy Dependence on Imports - Around 85-90% of the total raw material needed for recycling is sourced through scrap imports, which can pose various risks for recyclers. Such risks include exposure to currency fluctuations, volatility in global scrap prices, and upfront cash payments that can lead to working capital shortages, and longer turnaround times. Furthermore, the heavy reliance on imports means that any potential increase in duty rates on scrap imports could negatively affect the profitability of recyclers unless they can effectively pass on the costs to customers which is anticipated to hamper the market growth.
- Lack of Automation
- Availability of High-Strength Composite Material
Secondary Aluminum Alloys Market: Key Insights
The secondary aluminum alloy market in Europe is anticipated to garner a significant market revenue of USD 6197.99 Million by the end of 2030, and also grow with a CAGR of 3.56% during the forecast period. One of the major factors anticipated to drive the market growth in the region is the growing use of aluminum in different end-use industries, including the manufacturing of vehicles. Presence of several of the major vehicle manufacturers in the region, for which, the demand for aluminum is continuously increasing, is also expected to drive the market growth in the coming years. Besides this, the rising production of primary aluminum in the region is also anticipated to accelerate the market growth. In other statistics by the International Aluminum Institute, in the year 2020, the production of primary aluminum in Western & Central Europe, and Russia & Eastern Europe, recorded 3334 Thousand metric tonnes and 4153 Thousand metric tonnes respectively.
On the other hand, the market in the United States is expected to grow with a CAGR of 5.66% during the forecast period, and attain a magnificent revenue by the end of 2030. The growth of the market in the country can primarily be attributed to the increasing aluminum wastes generated in municipal waste stream and the growing focus of the government of the nation to recycle the metal. According to the statistics by the United States Environmental Protection Agency (EPA), the total quantity of aluminum wastes generated in municipal waste stream grew from 340 Thousand tons in the year 1960 to 3890 Thousand tons in the year 2018. Moreover, recycling of this metal from municipal waste stream increased from almost negligible quantity in the year 1960 to 670 Thousand tons in the year 2018.
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The study further incorporates Y-O-Y Growth, market opportunities, demand & supply and forecast future opportunity in North America (United States, Canada, Mexico), South America, Europe (U.K., Germany, France, Italy, Spain, Hungary, BENELUX [Belgium, Netherlands, Luxembourg], NORDIC [Norway, Denmark, Sweden, Finland], Poland, Russia, Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Malaysia, Indonesia, Taiwan, Hong Kong, Australia, New Zealand, Singapore, Rest of Asia-Pacific), Middle East and Africa (Israel, GCC [Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman], North Africa, South Africa, Rest of Middle East and Africa).
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
5.30% |
|
Base Year Market Size (2024) |
USD 95.71 billion |
|
Forecast Year Market Size (2037) |
USD 187.29 billion |
|
Regional Scope |
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