Better cost economics of recycled aluminium has supported its consumption in India.
Chennai: Demand from automotive sector has been helped a steady growth in consumption of recycled aluminium. However, lack of efficient eco-system for scrap collection has been forcing consumers to import recycled aluminium.
In the past few years, automobiles have been increasingly using aluminium for reducing weight of the vehicles as well as to meet emission targets. Electric and hybrid vehicles are further increasing the demand.
Better cost economics of recycled aluminium has supported its consumption in India. Some of the alloys manufactured using recycled aluminium is 15 to 20 per cent cheaper that made from primary aluminium.
No wonder, automotive sector now consumes 65 per cent of recycled aluminium in India. Further, demand from the building and construction sector, which consumes 10-15 per cent of overall recycled aluminium, has also increased with rising penetration of recycled extrusions, especially in window frames.
This increased consumption helped demand for recycled aluminium outpace the off-take of primary aluminium by more than twice in the past few years. The share of recycled aluminium in aggregate aluminium market stood at 34 per cent in fiscal 2019, up from 26 per cent from three years ago.
“Demand for recycled aluminium has outpaced primary aluminium demand by 2.3-2.4 times over the last five years, led by better cost-economics,” Prasad Kopar-kar, Sr Director, Crisil.