The secondary aluminium market in Europe: challenges and opportunities in scrap management
The secondary aluminium market in Europe is going through a phase of profound transformation, characterised by complex dynamics that are redefining its balance. Aluminium scrap represents a raw material of exceptional strategic value, since the metal obtained from recovery and recycling requires only 5% of the energy needed for primary production. This characteristic, combined with the escalation of energy costs, has pushed numerous operators in the European Union in the sector of the first transformations of aluminium and its alloys - from foundries to extruders, from rolling mills to casting producers - to revolutionise their procurement strategies.
The growing demand for recycled aluminium for die casting has led to a significant increase in the demand for scrap in recent years. This trend is not only a response to economic logic, but also to stringent greenhouse gas (CO2) emission reduction targets to build a more sustainable future. However, the evolution of this market has generated increasingly fierce global competition for access to recycled materials.
Growing global competition for aluminium scrap
The evolution of global demand has brought the sector to a tipping point. While the need for aluminium raw material, both primary and secondary, continues to grow within the EU, the situation becomes even more complex when considering the accelerated expansion of markets such as China, India and Asia. For primary metal, European dependence is evident: the EU produces barely 15% of its own needs. On the secondary side, the challenge is different but equally critical: local exporters of recycled material are discovering more profitable opportunities in high-growth countries, both for consolidated quality scrap and for high-quality processing waste and post-consumer materials (PCR).
The numbers testify to the intensity of this dynamic. In 2019, secondary aluminium accounted for 36% of the total supply of the material in Europe. In 2021, the EU recycled around 4.9 million tonnes of aluminium, achieving a recovery rate of 69% of the aluminium generated.
Regulation and scarcity of aluminium scrap: the sector's concerns
This massive increase in exports has raised serious concerns among European industry associations, including EUROFER, FACE and other trade organisations. The real risk is the loss of a strategic asset such as aluminium scrap, with negative consequences for the Union's circular economy objectives. The associations' response has been to propose more effective regulatory measures for exports to non-OECD countries to ensure that strategically valuable materials remain available to feed local industries.
From February 2025, the EU has adopted a new Waste Shipment Regulation (WSR) that introduces restrictions on exports of scrap metal to non-OECD countries. However, there are no direct restrictions on exports to OECD countries.
This export activity has certainly supported prices in the EU and Great Britain, with aluminium scrap and ingot prices steadily increasing in recent months. However, the sector is approaching a breaking point with possible inflationary consequences in some market segments. The EU is in urgent need of finding a sustainable balance between exporting scrap and safeguarding the proper functioning of the internal recycling chain.
The impact on European producers and the sustainability of aluminium die casting
The strong growth of exports to China, India, Turkey and other Asian countries, often supported by aggressive purchasing policies, is putting European operators at a competitive disadvantage. The use of scrap and aluminium processing activities in recycling are becoming increasingly unprofitable operations for European companies. In addition to the loss of valuable materials and job opportunities, there are significant concerns about future compliance with the European Commission's CO2 emission reduction requirements.
The global secondary aluminum market has seen significant growth from 2020 to 2025, driven by increased recycling efforts and rising demand across various sectors. Secondary production has more than doubled in Europe since the early 1990s, positioning the continent as the market leader in terms of volume. However, as early as 2024 and early 2025, Asian traders are offering 20-40% higher prices than European traders, depending on the scrap grade, to ensure business continuity in an increasingly competitive environment.
Regional Dynamics and Technology Challenges in Aluminum Recycling
Europe: Navigating Weak Demand and Overcapacity
In 2025, the European secondary aluminum alloy market faces significant challenges related to weak demand and overcapacity. This situation is exacerbated by a more fragile general economic climate and increasing global competition for scrap, which have generated price pressure and diverted increasingly important shares of materials to China, India, Turkey and Asia, away from local operators.
Asia-Pacific: the rise of new dominant players
The Asia-Pacific region, in particular China, India and Japan, has emerged as a major player in the secondary aluminium market. The strong development of the automotive sector in these countries has contributed significantly to the parallel growth in demand for secondary aluminium. With insufficient local production, these countries need to import scrap from other areas, especially Europe, despite high transport costs and long delivery times. Lower labour and production costs allow these countries to invest more resources in raw materials, maintaining competitive margins over EU producers.
The main challenges of the European scrap market
The secondary aluminium market in Europe faces several critical challenges that affect efficiency, prices and sustainability:
- Regulatory and environmental compliance: The European Union has stringent environmental and recycling regulations that can make it difficult for companies to stay compliant. The EU’s circular economy policies and recycling targets require high-quality scrap treatment and material recovery, putting pressure on recyclers to meet these high standards.
- Price volatility: Aluminium scrap prices are highly volatile, influenced by global supply and demand and material quality. Economic fluctuations in the automotive, construction and packaging sectors – major consumers of aluminium – can lead to unpredictable prices.
- Quality variability: The quality of scrap can vary significantly, with some sources containing contaminants or requiring complex processing for reuse. This impacts the efficiency of recycling operations and increases operating costs, explaining why third-country importers prefer to purchase “cleaner scrap” from Europe at higher prices.
- Technological challenges: Despite advances in recycling technologies, technical challenges remain in efficiently separating and sorting aluminium scrap. More advanced sorting technologies and better infrastructure are needed to improve the quality and yield of recycled material.
Towards a sustainable future: conclusions and outlook
In 2023, EU exports of recyclable raw materials to non-EU countries reached 39.3 million tonnes, with more than half of them being metals. Turkey emerged as the main destination, overtaking China. A concrete example of the impact of these dynamics comes from an industry leader that in 2024 purchased 20,300 tonnes of aluminium scrap (worth €36 million) to produce foundry alloys. This volume constitutes 54.45% of the scrap content in ingots mainly destined for the EU automotive industry.
The growing demand for higher recycled aluminium content is driven by eco-sustainability concerns, but obtaining this type of scrap has become increasingly difficult in the domestic market. The shortage of aluminum scrap is not only due to increased exports to the East, but also to the lower supply generated by the automotive segment due to reduced demand for electric vehicles and lower interest in purchasing new cars due to the current economic situation.
To ensure a sufficient supply of aluminium scrap within the European Union, a revival of the economy and the implementation of appropriate measures to regulate exports are essential. The health of the domestic aluminium recovery and recycling system will not only improve the overall CO2 footprint, but will also increase margins thanks to the lower cost of raw materials in the supply chain, protecting the technological heritage of European refiners who have significantly contributed to the development of aluminium castings in the past decades.
Source: A&L Aluminium Alloys Pressure DiecastingFoundry Techniques