When the EU's trade and economic security commissioner Maros Sefcovic announced at the European Aluminium summit in Brussels last month that the European Commission has begun preparatory work on a new measure that will restrict exports of aluminium scrap out of the bloc, it represented not only the culmination of a growing chorus of voices in Europe that have been clamouring for such a measure throughout the year, but potentially also the start of a new wave of protectionism in global scrap markets.
Demand for recycled aluminium, and the sustainability benefits it offers in contrast to a primary industry that accounts for around 3pc of global industrial emissions, is running well beyond supply levels that have been diminished by one of the longest downturns in manufacturing activity in living memory. And yet Europe has continued to export aluminium scrap in greater and greater volumes, with demand particularly from India and other export markets in Asia seemingly insatiable. The EU exported around 1.26mn t of aluminium scrap in 2024, that figure having increased at a compound annual growth rate of over 10pc since 2020.
This trend has so diminished the availability of aluminium scrap in Europe that European Aluminium director general Paul Voss said that he had never seen the industry so alarmed by a single issue than by this one, calling the situation "genuinely desperate".
Europe is not taking the lead on aluminium scrap export restrictions, as a number of countries in Asia and Africa have already enforced their own measures. China maintains a 15pc export duty on aluminium scrap, while the UAE charges AED100/t ($27/t) on aluminium scrap exports, having previously enforced a full ban over 2020-23. South Africa also imposed export duties on scrap metal in 2020.
Neither is Europe the only region considering new restrictions. India is reportedly contemplating limits on aluminium scrap exports to safeguard domestic supply for the rising downstream demand that has attracted so much European scrap in recent years, while US trade group the Aluminum Association has called for an immediate ban on exports of used beverage cans, while also lobbying the federal government for potential restrictions on exports of other grades of mill-quality aluminium scrap.
This rising level of protectionism in scrap markets around the world speaks to the dramatic fall in scrap availability in recent years. The downturn in industrial activity particularly in western countries has slowed the generation of fresh scrap units, both in the form of post-industrial manufacturing leftovers and post-consumer scrap from the shredding of old cars and demolition of old buildings. Meanwhile the number of scrap consumers has risen exponentially as more and more industries demand greener products and as scrap sorting and processing technologies have advanced to the point of allowing lower grades of scrap to be used in applications with higher purity requirements.
The latter point is one that the European Aluminium Association is using to counter objections to the EU's export restriction plans. Exporters have contended that Europe cannot process all the scrap it produces, and that lower grades particularly rely on export markets to find consumers. But as sorting technology has improved, the portion of scrap that EU consumers cannot process has shrunk, blunting one of the main arguments against the export restriction.
The tone of Sefcovic's announcement suggests that the EU is determined to move quickly with its plans and expects to have some form of export restriction in place by the spring. Given that scrap markets will certainly remain tight globally in 2026, similar measures may follow quickly in the US, India and elsewhere, while those nations with existing export restrictions in place will have no reason to reconsider their position. As scrap metal moves from waste product to legitimate commodity in the perception not just of its industry participants but of its regulators, scrap protectionism will become a common theme in the months and years to come.
