A Look at The Price of Aluminium Scrap

Aluminium is one of the most ubiquitous metals on the planet, woven into the fabric of our daily lives, from the cans in our recycling bins to the cars we drive and the buildings that define our skylines. This widespread use means that scrap aluminium is ubiquitous in domestic and industrial waste streams. But if you've ever wondered why the price you get for your aluminium fluctuates, you're not alone. A fascinating array of factors influences the value of this highly recyclable metal, and understanding them is key to maximising your return. In this blog post, we'll delve into the core reasons behind these price shifts and equip you with practical strategies to ensure you get the most from your aluminium scrap.

Where Does Scrap Aluminium Come From?

Aluminium scrap originates from many sources, reflecting its widespread use in modern society. We find it in end-of-life vehicles, prevalent in engine blocks, wheels, radiators, and body panels, contributing significantly to a car's overall recyclability. The construction industry is another major contributor, providing scrap from demolished buildings through window frames, doors, roofing, and structural components. Domestically, our kitchens and homes are rich sources, from used beverage cans (UBCs) and food containers to foil, old pots and pans, and discarded household appliances containing valuable aluminium. Furthermore, industrial manufacturing processes generate "new scrap" or "pre-consumer scrap" as offcuts, shavings, and trimmings while producing various aluminium products and machinery, which are efficiently collected and re-melted. Even discarded electronic appliances and old electrical wiring contribute to the aluminium scrap stream, highlighting how integrated this metal is into our infrastructure.

What factors affect the price of scrap aluminium?

Like any commodity, the price of scrap aluminium is a dynamic reflection of several interconnected factors. At the forefront is the fundamental principle of supply and demand. When industries like automotive, construction, and packaging are booming, their increased need for raw materials drives up demand for virgin and recycled aluminium, pushing scrap prices higher. Conversely, a slowdown in these sectors can lead to an oversupply of scrap and a dip in value.

Global market conditions also play a significant role. A benchmark is the live trading price of primary (newly produced) aluminium on international exchanges such as the London Metal Exchange. Suppose the cost of creating new aluminium rises due to high energy prices (as aluminium smelting is incredibly energy-intensive, accounting for up to 40% of production costs). In that case, scrap aluminium becomes a more attractive and cost-effective alternative, increasing its demand and price.

Beyond this, the quality and purity of your scrap aluminium are paramount. Clean, unalloyed aluminium, free from contaminants like plastic, steel, or other non-metal materials, will always command a higher price. This is because it requires less processing and purification at the recycling facility. Geopolitical events and international trade policies, such as tariffs or import restrictions, can also disrupt global supply chains and significantly impact prices. Finally, even seasonal variations can have an effect, with warmer months sometimes seeing increased construction activity and, consequently, higher demand for building-related aluminium scrap. Understanding these elements is key to navigating the fluctuations and securing the best value for your aluminium scrap.

If you have any questions about aluminium scrap prices, please get in touch with us today.