Turkey’s Aluminum Scrap and Waste Market Outlook Report

Product Description

With a GDP of $761 billion in 2019, Turkey was the second largest economy in the region that year, behind Saudi Arabia. The country joined the Economic Cooperation Organization in 1961 and also became a member of G20 in 1991. However, Turkey is still a developing country, according to the UN in 2019. With an annual consumption of 1.2 million tonnes of aluminum, the country is the largest consumer in the region. But there is only one primary smelter in the country, which has ramped up capacity to 82,000 tonnes since late 2015 with renovation and improvement plans. High power costs (a major part of aluminum production costs) have made primary aluminum production less attractive in Turkey.

Market drivers of aluminum scrap and waste

As a secondary source of raw material for downstream plants, aluminum scrap is always priced lower than primary aluminum. The lower production costs as a result of the price spread between primary and secondary aluminum make scrap more attractive to producers. The discount of scrap over aluminum is expected to increase as supply grows, leading to higher consumption. Moreover, using scrap from similar products with similar alloy content reduces the need for alloying. This will in turn significantly reduce the consumption of alloying elements. Yet this is true only when using sorted aluminum scrap. Over the recent years, as demand for scrap has grown and the value of scrap has been recognized, collection and sorting have improved.

The most important factor that limits scrap consumption is the impurities that can lead to lower-quality products. This puts pressure on scrap consumption or restricts it to applications where the chemical composition is not crucial. With the increasing demand growth for higher-quality products, demand growth for scrap will be under further pressure.

Overview of Turkey’s aluminum scrap and waste market

About a quarter of total aluminum consumption in Turkey is sourced from scrap. Despite the strong domestic demand for aluminum and the per-capita aluminum consumption that is 10% higher than the global average, the share of scrap in total aluminum products is lower than the global average due to the easy availability of primary aluminum.

Generally, the country’s demand for aluminum is mainly met through imports (pure or alloy). Yet the trade balance of Turkey’s aluminum scrap and waste has always been tipped towards net imports; between 2009 and 2019, net imports have increased from 12 tonnes to 118,000 tonnes. Higher production costs of aluminum semis in Turkey have prompted producers to produce their own primary aluminum; using scrap, the cheapest source of aluminum, will significantly reduce costs. Thus, the tightness of scrap in the country is expected to continue to intensify. But as scrap becomes more important and collection rates increase, undersupply is expected to heighten at a slower pace.

Breakdown of Turkey’s aluminum scrap and waste market

Domestic aluminum waste and scrap supply (both new and old, separately) in the forecast timeframe as well as the previous period has been broken down using three factors. The first factor breaks down the market into three categories based on alloy material: commercially pure aluminum, heat-treatable alloys, and non-heat-treatable alloys. Past and future trends for each type of material have been analyzed. Heat-treatable scrap holds the largest share of the market. In the second breakdown, products are distinguished based on product type: lithographic sheet, used beverage cans, wires and cables, radiators, extrusions, pots and pans, engine pistons, other cast auto parts, tiles and dampa, boring and turning, and other products. The domestic aluminum waste and scrap market has also been broken down into soft and hard scrap over the timeframe; hard scrap holds the main share of the market. Finally, using the third factor, aluminum scrap is categorized based on the type of consumers. Secondary smelters are the largest consumers of aluminum scrap.