US aluminum scrap availability to remain tight

San Diego （Platts）18 Jan----Aluminum scrap availability is likely to remain tight in the US and elsewhere because of a number of macroeconomic reasons, one of the largest recyclers of aluminum scrap in the US said Monday.

Ongoing credit risks and demand in the BRIC countries -- Brazil, Russia, India and China -- could make scrap availability in the US tight, Gary Curtis, president of Wise Recycling, told delegates at the Platts Aluminum Symposium in San Diego.

"The continued weakness in US manufacturing is also adding to the tightness of aluminum scrap availability," he said.

Due to rising demand in emerging markets, "the export market is beginning to reach for higher grades of scrap. We haven't seen them go after extruded scrap," he said, adding that this would probably come.

In the US, there is less aluminum scrap being generated by the automotive dismantlers. This was a direct reflection of weak consumer confidence and an indirect result of high unemployment.

"People are driving cars for longer and the Cash for Clunkers program in 2009 already took the low-hanging fruit," said Curtis.

And in general, "consumers are not replacing household items," he added.

Construction also remained weak, contributing to the tightness, he said.

Other factors hampering scrap collection are "onerous" anti-theft legislation as well as different rules and laws at various locations, he said. "You can have a city where the [requirements] are very tough and just outside the city, you can have a competitor that's not bound by the same regulations," he added.

The only exception was in used beverage cans, where the availability had remained stable, he said. One of the reasons was because during economically hard times, "people tend to recycle more," he added.

Wise had actually seen an increase in UBCs in the recession because of this and through increasing its market share, Curtis said, adding that a growing green movement was helping to increase the recycling rates of UBCs.

On its web site, Wise Recycling describes itself as one of the largest, "direct-from-the-public" collector of aluminum beverage containers in the US.