A vision of global aluminium recycling in 2020 - Roland Scharf-Bergmann Dubai, November 4, 2013 - Metal Bulletin
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A vision of global aluminium recycling in 2020 Roland Scharf-Bergmann Dubai, November 4, 2013
A resource-rich, global aluminium company
With robust positions across the value chain
• Global provider of alumina, aluminium and
Bauxite & aluminium products
Alumina
• Leading businesses along the value chain; raw
materials, energy, primary metal production,
Energy aluminium products and recycling
• 13 000 employees involved in activities in more
than 50 countries
Primary
Metal
• Market capitalization ~NOK 55 billion
Rolled • Annual revenues ~NOK 65 billion
Products
• Included in Dow Jones Sustainability Indexes
and FTSE4Good
50% joint venture
in extruded products
(2)
Attractively positioned, global reach
Norway Continental Europe
• 900,000 tpy hydropowered aluminium capacity • Leading upstream, midstream
• Technology center, R&D for next-generation smelter and downstream positions
• Hydropower developments • Recycling network
• Recycling/remelting
North America
• Alouette aluminium smelter in
Canada, expansion potential
• Leading position in U.S. extrusion Asia
• Recycling/remelting • Growing metal marketing position
Brazil
• World-class operations and
resource base
Middle East
• Bauxite and alumina growth projects • Qatalum 1 in production Australia
• Albras aluminium smelter • Qatalum expansion opportunity • Primary aluminium production
(3)
Content • Will the move “east” continue unabated? • How will legislation foster – or hamper – recycling growth? • How key is technology and innovation to cost-effective recycling? • Big is beautiful – will only large recycling companies and smelters survive for the next generation? • As margins shrink, what options are there for adding value to product? • Can secondary aluminium truly compete with primary on a quality basis? (4)
Content • Will the move “east” continue unabated? • How will legislation foster – or hamper – recycling growth? • How key is technology and innovation to cost-effective recycling? • Big is beautiful – will only large recycling companies and smelters survive for the next generation? • As margins shrink, what options are there for adding value to product? • Can secondary aluminium truly compete with primary on a quality basis? (5)
Scrap supply* in Western Europe increases
* End-of-life and pre-consumer scrap
kt
• Announced new capacities
and closures adding balance
of 400 kt total capacity by
2020
Source: CRU LT Oct 2011
Europe needs to add 600 kt recycling capacity until 2020
(6)
Aluminium scrap generation in China increases fast
Creating need for better & more recycling capacity
kt
• China biggest growth region for industrial and End-of-Life scrap
• Imports to China maintaining on today‘s levels due to domestic scrap generation
• Europe will limit scrap exports to cover domestic demand
China needs to add 6 Mt recycling capacity until 2020
(7) Source: CRU, Hydro Strategy
Source: Metal Bulletin, Hydro Strategy
Content • Will the move “east” continue unabated? • How will legislation foster – or hamper – recycling growth? • How key is technology and innovation to cost-effective recycling? • Big is beautiful – will only large recycling companies and smelters survive for the next generation? • As margins shrink, what options are there for adding value to product? • Can secondary aluminium truly compete with primary on a quality basis? (9)
Rising sustainabiliy expectations hitting key markets
Driven from end consumers, NGOs and legislation
High
Customer
expectations
Sustainability requirements
Market NGOs
Expectations
Legislation
Low
Upstream Value Chain Downstream
Reputation of aluminium as such matters, including up-stream
(10)CO2-emission targets
A twin challenge for the aluminium sector
• Satisfy growing demand in the coming decades
− tripling or quadrupling…
• Reduce overall GHG emissions by 50-85% by 2050 (2oC target)
Emission (E) = Production (P) * emission per ton (e)
If emissions to be halved and production will be tripled
Emissions per ton need to be reduced by 85%.
Recycling key driver and necessary for positive image of aluminium
(11)Scrap market is becoming more consolidated
And influenced by governmental regulations
• The European scrap market has seen a lot of
consolidation the last years
− A few big players are emerging in each country/region
• Governmental bodies are introducing measures to
ensure the sector’s sustainability and transparency:
− Cash ban in France and UK
− «Kreislaufwirtschaftsgesetz» in Germany
− Discussions on developing EU control of scrap exports
• Consolidation and regulations have contributed to
improving the image of the scrap business
− Companies are working and certified according to ISO
standards
(12)Content • Will the move “east” continue unabated? • How will legislation foster – or hamper – recycling growth? • How key is technology and innovation to cost-effective recycling? • Big is beautiful – will only large recycling companies and smelters survive for the next generation? • As margins shrink, what options are there for adding value to product? • Can secondary aluminium truly compete with primary on a quality basis? (13)
Cost comparison world regions
Based upon 2000-2005 data
200
180
160
140
Euro/Tonne
120
100
80
60
40
20
0
average top class average top class average top class
industrialized nation emerging country emerging country far east
Source: Scharf-Bergmann, personnel energy environment freight total
OEA congress 2005 in Vienna
Main focus: productivity per headcount and energy consumption
Shifting focus in new millenium: raw material cost and supply
(14)Recycling towards highly alloyed products Secondary foundry alloys (SFA) as “sink” for post-consumed scrap (15)
SFA saturation – parameter variation (16) Source: Modaresi and Müller 2012
Measures against oversaturation of “SFA-sink”
• Improve scrap sorting
− No foreign materials
− By alloy/alloy group
• Develop recycling-friendly alloys and
products
− Wider specifications for alloying and trace
elements
− Adjust heat treatment processes
− Adjust painting processes and systems
• Develop melt refining process to
refine Al from certain elements
− Challenge:
− Efficiency
− Economically feasable
(17)Content • Will the move “east” continue unabated? • How key is technology and innovation to cost-effective recycling? • Big is beautiful – will only large recycling companies and smelters survive for the next generation? • As margins shrink, what options are there for adding value to product? • Can secondary aluminium truly compete with primary on a quality basis? (18)
Global aluminium smelting cost 2013
Global cost curve 2013
(USD/t)
2 600
2 400
2 200
2 000
1 800
1 600
1 400
1 200
1 000
800
600
400
200
Accumulated
0 production (kt)
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000
Source: CRU
(19)Recycling plants • 1990 first recycling plants >100 kt/a • 2013 recycling plants exceeding 500 kt/a (China) • Globalization leading to more competition − Internet auctions − Scrap travels long distances around the world • Niche players surviving − Positioning in local markets − Access to raw materials − Flexibility of supply (20)
Content • Will the move “east” continue unabated? • How will legislation foster – or hamper – recycling growth? • How key is technology and innovation to cost-effective recycling? • Big is beautiful – will only large recycling companies and smelters survive for the next generation? • As margins shrink, what options are there for adding value to product? • Can secondary aluminium truly compete with primary on a quality basis? (21)
Options for adding value to product Recycling offers only little options • Low carbon footprint of recycled product − Recycling consumes only 5% of energy consumed for primary production − Market demand for recycled material rising • Upstream integration − Investment into scrap collection and processing − Closing recycling loops – product-to-product recycling − Integration with suppliers – strategic alliances • Downstream Integration − Investment into manufacturing – extrusion, rolling, shape casting, etc. − Integration with customer – strategic alliances (22)
Recycling – a pure bonus
Aluminium – the energy bank
5%
to recycle
75%
still in use
(23)Content • Will the move “east” continue unabated? • How will legislation foster – or hamper – recycling growth? • How key is technology and innovation to cost-effective recycling? • Big is beautiful – will only large recycling companies and smelters survive for the next generation? • As margins shrink, what options are there for adding value to product? • Can secondary aluminium truly compete with primary on a quality basis? (24)
Free enthalpy of formation
of metal oxides, chlorides and fluorides at 800 °C and 1 bar
0 Cu(II)
Freie Bildungsenthalpie ∆ G° [kJ/mol O2/Cl2/F2]
Pb(II)
-200 Ni(II)
Co(II) Cu(I)
Fe(II)
Sb(III)
-400 Zn(II) Fe(III)
Cr(III) K(I)
Mn(II)
-600
Ti(IV)
Na(I)
Ti(II) Si(IV)
-800
Mg(II) Li(I) Ti(III)
Oxide
Ca(II) Al(III)
-1000 Chloride
Fluoride
-1200
(25)Are alloys recycling compatible?
1070A is a good source…
… but a bad sink
Source: A.N. Lovik, D. Müller, NTNU Trondheim, Norway
(26)Are alloys recycling compatible?
319 is a bad source…
… but a good sink
Source: A.N. Lovik, D. Müller, NTNU Trondheim, Norway
(27)Are alloys recycling compatible?
224 wrought and cast alloys
Recycling difficult between different
alloy families (1xxx, 3xxx, 6xxx)
Recycling is mainly possible within
alloy families…
… or into certain cast alloys
Source: A.N. Lovik, D. Müller, NTNU Trondheim, Norway
(28)Global demand for aluminium
Primary and scrap-based production
Global aluminium demand
(’000 tons)
CAGR 2013-2030
140 000
130 000
120 000
110 000
4.2 %
100 000
90 000
80 000
70 000
4.0 %
60 000
50 000
40 000 3.9 %
30 000
20 000
10 000
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Demand for primary aluminium Scrap Demand for semis - Basecase
Source: GARC / CRU / Hydro Analysis *) External Scrap being Post Consumed Scrap and Traded New Scrap
(29)Summary
• Will the move “east” continue unabated?
− YES
• How will legislation foster – or hamper – recycling growth?
− Legislation will foster recycling growth driven by the need to reduce global emissions and
energy consumption improving resource efficiency
• How key is technology and innovation to cost-effective recycling?
− Will be key, if right focus is given
• Big is beautiful – will only large recycling companies and smelters survive for the next
generation?
− Yes, but there will be exceptions for recycling companies
• As margins shrink, what options are there for adding value to product?
− Carbon footprint of recycled metal main added value
• Can secondary aluminium truly compete with primary on a quality basis?
− Yes, if material properties are clearly defined and trace element accumulation controlled
(30)Aluminium – a surprisingly big part of life
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