Reversal of fortunes

Aluminum scrap markets in North America were characterized by oversupply leading up to the pandemic. But aluminum scrap’s fortunes started to change in the fall of 2020. By the end of the year, aluminum scrap dealers were saying they could all but name their price and that prompt delivery appointments were readily available.

Aluminum’s recent strength could be further supported by a global green energy transition.

Powerful transition

As Julian Kettle, senior vice president and vice chair of metals and mining at U.K.-based Wood Mackenzie, states on that research and consultancy group’s website, “Metals will play a starring role in the energy transition.” He cites aluminum, cobalt, copper, nickel and lithium as being the most vital metals because of their roles in key components used in electric vehicles (EVs), battery energy storage, wind and solar technology and electricity transmission.

Kettle adds that aluminum demand will increase by about a third by 2040 as a result of the green energy transition.

According to the World Bank, this transition will require more aluminum than any other metal, with green energy technologies requiring almost 6 million tons of the metal each year by 2050. The primary application for aluminum is in frames for solar modules.

The metals and mining industry will need to invest heavily to meet the needs of the energy transition, Kettle writes, though he also notes that existing production methods would contribute 12 billion metric tons of carbon to the environment by 2040.

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