SAN ANTONIO There has been a "drastic" decrease in the apparent supply of aluminum scrap in North America as more companies look to boost scrap usage, one industry executive said.
"There is never enough scrap. It is a highly sought after item. Its a source material for all the secondaries," Scepter Inc. president Garney B. Scott III said in a press conference at the Aluminum Associations spring meeting in San Antonio April 2.
There are encouraging signs, such as the recycling rate of used beverage cans (UBCs) increasing to 67 percent in 2012, the latest year for which there is data, Scott said.
In addition, scrap exports dropped by 350 million pounds in 2013, he said, citing Aluminum Association statistics.
Such data suggest there is more scrap in North America to be recycled, Scott said, but added that the market wants even more.
"The statistics dont show that there has been a drastic decrease in the supply of scrap," he said. "There is roughly the same amount of scrap in North America as there was last year and the year before. ... But many, many companies seek this scrap and more and more are interested in consuming this scrap as an input."
Primary aluminum has at times been more attractive than scrap in past decades, and that situation "might happen again," Scott said, pointing to the early 1990s when "cheap Russian prime" was being brought into the U.S. market.
"It was so cheap you could sometimes use that instead of scrap," he said. "If there is a flood of cheap P1020 maybe it works again. ... But the market will correct itself; its always going to correct back to its true value."
Meanwhile, the Waverly, Tenn.-based secondary aluminum recycling and trading company wont look to expand after its recent purchase of a facility in Tatabanya, Hungary, Scott said. "I think well take our time digesting that plant before we work on any more acquisitions," he added.
The Hungarian smelter, purchased in October, was previously owned by German recycling group Scholz AG (amm.com, Oct. 21).