Jake Davison, Director at City Metals Recycling discusses.

Like any other yards that collect and process Aluminium, metal recyclers will be well aware of the price rise in Aluminium these last twelve months. With it already at a decade high of approx. £2,120 a tonne, the price for Aluminium has gone up around 40% alone this year (60% if you look back into last year). Even Copper that has always been the benchmark for base metals and the poster child of the metal trading world, hasn’t risen as much over the same period, only 17% at £6,810.

But why has this happened?

It is to do with the production of raw Aluminium and political instability. In the first instance, rising electricity prices in China (like elsewhere) has led to a slump in production at a number of foundries in its western Xinjiang region. Aluminium smelting consumes huge quantities of energy. In addition, the country of Guinea recently experienced a Coup d‘etat by special forces, where the democratically elected President was removed from power. You may wonder why this is relevant? Guinea is the second largest provider in the world of Bauxite. In fact, it has the largest reserves in the world. This is used in the refinery process to create Aluminium Oxide, resulting in Aluminium metal. 

With the Government of Guinea dissolved there is uncertainty over mining and the subsequent export of raw material. It raises the question of how likely a country without a functioning government can supply any raw material, let alone bauxite, at the same rate and consistency they previously did, especially when land and sea borders have been closed. 

Good news for recyclers?

This can only be a good thing for metal recyclers, certainly while any doubt over raw material production continues. Recycled Aluminium without any loss of quality is surely a great alternative when any global issue may affect the primary supply chain. It continues to highlight the positives of recycling metal such as the reduction in energy use compared to producing a raw material, and the destruction of habitat used in mining. Oh, and it keeps us metal recyclers in business!