According to press reports, the growing demand for consumer goods and automobiles in India is likely to give a huge boost to the consumption of recycled aluminum.
Subramaniam Arumugam, marketing director of Almex Corp., told Reuters that demand for recycled aluminum was bound to shoot up in India because it was much cheaper than the primary metal and also environmentally friendly.
"It will be used for everything from cans, scooters to construction. It can even be used in specialized alloys for making automobile to aerospace parts," he said.
Yet India was lagging far behind developed countries, where usage of scrap aluminum is nearly 10 times that of primary aluminum because of energy savings, he said.
"Here, in India, it is still a very unorganized industry. Most of the recycled aluminum is made by small firms. In another three to four years, the secondary aluminum industry will take off in a big way," Arumugam said.
Industry officials estimated the availability of recycled aluminum in the Indian market at about 600,000 metric tons a year.
India's annual output of primary aluminum is estimated at more than 800,000 metric tons.
"If you see India's per-capita consumption of aluminum, it is 0.6 kilograms per person. Whereas in developed markets the consumption level is around 20 kilograms," said S.K. Banerjee, former managing director of India's second-largest aluminum producer, NALCO
"India obviously has a tremendous (potential) market for recycled aluminum," he added.
Banerjee said recycled aluminum was sure to shadow growth in primary aluminum usage, which is projected to more than double in the next five years.
Industry officials said recycled aluminum had a huge competitive advantage as the cost of manufacturing was only 5 percent of primary aluminum.
"The application of such recycled aluminum can be in everything from automobile parts to other sophisticated devices," an industry official said. "But I expect tertiary firms rather than the big primary producers to take more to this product."
He said while big aluminum firms such as NALCO already had integrated complexes for processing bauxite into aluminum, medium-sized firms usually did not and therefore would probably opt for recycled metal instead. Reuters