United Arab Emirates’ Aluminum Scrap and Waste Market Outlook Report

Product Description

With a per-capita GDP of $60,600 in 2019, the United Arab Emirates was the second largest economy in the region that year, behind Qatar. Despite being the most diverse economy in the Gulf Cooperation Council (GCC), the country is still reliant on oil. Oil and petrochemicals account for a major portion (more than half) of the country’s exports. Gold, diamond, and pearl (as jewelry) account for a quarter of exports from the country. Aluminum production has a long history in the United Arab Emirates; it is the third country in the region that started producing aluminum, behind Iran and Bahrain. With annual production of 2.6 million tonnes, it is the largest producer in the region and the fifth largest on a global scale. Aluminum production in the country started with the commission of Dubal in 1979. Since 2009, EMAL, the second largest producer in the country, also joined in the production of aluminum. A few years later in 2013, the two countries were joined under EGA. In order to minimize the risk of raw material supply, the company invested in a mine in Guinea to secure the supply of bauxite. It also built an alumina refinery, which was commissioned last year. Over 2 million tonnes of the country’s 5.2-million-tonne alumina demand will be supplied from domestic output, with the remaining part being imported through long-term contracts with foreign companies.

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. However, since scrap is produced abundantly in the United Arab Emirates, the low premium weighs down on the drive towards scrap 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, which can further improve aluminum scrap consumption.

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 the United Arab Emirates’ aluminum scrap and waste market

The United Arab Emirates is one of the major exporters of aluminum scrap and waste in the Middle East. Due to the relatively low premiums of primary aluminum, many downstream plants are not interested in refining molten scrap, as the impurities necessitate refining. Yet, advantages such as low prices and the reduced need for alloying are the main drivers of demand for processing and re-melting scrap in the United Arab Emirates. Thus, the country’s recycling input rate has increased from lows of 0.1% to almost 12% over the recent years.

As capacities for re-melting aluminum scrap are developed and expanded over the coming years, demand is expected to grow. At the same time, as aluminum scrap has gained momentum, collection has improved, driving domestic supply. Thus, the United Arab Emirates is expected to remain a net exporter of aluminum scrap, but with the developments in the country’s domestic secondary aluminum market, the growth rate of net exports is expected to slow down over the coming years.

Breakdown of the United Arab Emirates’ 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.

Key players in the United Arab Emirates’ aluminum casting parts market:

• Alucop Global DMCC
• Harwal Group Company