As US scrap dealers struggle to adjust to a rising influx of hard-to-sort, potentially valuable aluminum automotive scrap, rolling mills making body sheet say closed loop recycling is moving forward.
"I think a lot of the programs today are closed loop. It is an extremely valuable material as a piece of scrap, so we want that back," Constellium rolled products chief executive Buddy Stemple said late last week at Aluminum Association's annual meeting in Washington, DC.
Novelis North America senior vice-president Marco Palmieri echoed Stemple's sentiment, describing his company's closed loop recycling program with Ford as being in a "beautiful balance".
"The same truck that brings the coil takes back the scrap. It really works like a symphony," Palmieri said.
Still, several scrap dealers, brokers and original equipment manufacturers have told Argus that they continue to search for the best way to deal with piling up automotive aluminum clips generated from the stamping process.
Stamped aluminum auto products are typically of either 5000 or 6000 series aluminum. But stampers that are accustomed to making only steel parts up until recently could not easily separate the two families of scrap for useful remelting.
The resultant mixed package of aluminum scrap can end up trading at a major discount to other industrial scrap, causing headaches for dealers that entered formula deals with stampers at narrow spreads.
The excess of scrap will likely dry up as the autobody sheet market matures, a marketplace that has only truly existed since 2014, when Ford launched its new, aluminum-intensive F-150 truck.
"Now I can tell you that when you start up some of these [automotive sheet] lines, the recovery in the early days is not real good and you have got a lot of excess scrap," Stemple said. "But when you get your process in control and you are optimized, then the scrap rate goes back down."
New US auto body sheet investments will be ramping up through the end of 2021 though, with the last planned project being Braidy Industries' greenfield mill in Ashland, Kentucky.
