According to China Nonferrous Metals News, in June 2025, the Casting Aluminum Alloy futures contract officially commenced trading on the Shanghai Futures Exchange, becoming China's first futures product based on recycled metals. The launch of this product not only fills the gap in financial instruments for recycled metals but also provides effective price discovery and risk management tools for enterprises across the industrial chain. Since its listing, the price trend of Casting Aluminum Alloy futures has been highly correlated with Shanghai aluminum, with its overall center of gravity steadily rising. This upward trend benefits from both the broader aluminum market's strength and improvements in recycled aluminum's own supply-demand dynamics. Notably, the unexpected shutdown of a major Icelandic aluminum plant served as a key catalyst for the price surge, propelling cast aluminum alloy futures above the 21,000 RMB/ton threshold.

From “Supplementary Option” to “Strategic Pivot”:

Recycled Aluminum's Elevated Status

Aluminum is not only widely used in traditional sectors like construction and infrastructure but has also become indispensable in emerging fields such as new energy vehicles, photovoltaic components, and artificial intelligence computing infrastructure, demonstrating robust demand resilience and growth potential. Against this backdrop, recycled aluminum, with its significant green and low-carbon advantages, is evolving from a “supplementary option” to traditional primary aluminum into a “key pillar” for national resource security and achieving the “dual carbon” goals.

Data indicates that recycled aluminum production consumes only about 5% of the energy required for primary aluminum. In terms of carbon emissions, primary aluminum production emits approximately 11.2 tons of CO₂ per ton, while recycled aluminum emits just 0.23 tons—less than 2.1% of the former. Faced with dual pressures of tightening global aluminum resources and increasingly stringent carbon constraints worldwide, vigorously developing recycled aluminum and building a closed-loop recycling system has become an inevitable path to safeguard China's aluminum industry chain and supply chain security while enhancing international competitiveness.

Policy initiatives are advancing in tandem. The “Work Plan for Stabilizing Growth in the Nonferrous Metals Industry (2025–2026),” jointly issued by eight ministries including the Ministry of Industry and Information Technology, explicitly targets recycled metal production exceeding 20 million tons by 2026, with recycled aluminum accounting for 11.5 million tons. Concurrently, preliminary research for the 15th Five-Year Plan has sent clear signals, emphasizing “implementing dual-control systems for carbon emissions volume and intensity,” “promoting green and low-carbon transformation in key industries,” and “vigorously developing a circular economy.” The coordinated advancement of macro-strategies and industry-specific regulations injects certainty into the high-quality development of the recycled aluminum sector.

Raw Material Bottlenecks Emerge, Industry Enters Period of Profound Restructuring

Yet, beneath this promising outlook lie formidable challenges. The core constraint for the recycled aluminum industry lies in the stable supply of raw materials—scrap aluminum. According to data from the China Nonferrous Metals Industry Association, in 2024, the national recovery of recycled nonferrous metal raw materials reached 15.65 million tons, an 8.1% year-on-year increase. Among this, domestic scrap aluminum accounted for approximately 84.4% of the material used in recycled aluminum production. Despite improvements in the recycling system, overall supply remains tight.

This pressure stems from dual internal and external constraints. On one hand, China's social scrap aluminum recycling system remains underdeveloped, resulting not only in a total volume shortfall but also in recycled materials containing high impurity levels and unstable compositions, which increase smelting difficulty and costs. On the other hand, international scrap aluminum supply faces heightened uncertainty as multiple countries tighten scrap metal export policies to bolster domestic circular industries. Take the United States as an example: its recycled aluminum output now accounts for nearly 85% of the nation's total aluminum production. Recently, the Aluminum Association proposed restricting exports of high-grade scrap aluminum, such as beverage cans, outside North America and encouraged the repatriation of overseas aluminum production capacity. According to ITC Trade Map data, the United States remained the world's largest exporter of aluminum scrap in 2024, with exports reaching 2 million tons. Should these restrictions be implemented, Asian markets, particularly China, would face the risk of a significant contraction in high-quality scrap aluminum supply.

Meanwhile, China's recycled aluminum capacity continues to expand. By 2024, national recycled aluminum capacity exceeded 12 million tons, with production projected to surpass 14 million tons in 2025—far exceeding raw material supply capacity. This supply-demand mismatch has kept overall industry operating rates persistently low.

High Dependence on Automotive Demand

Policy's Double-Edged Sword Effect Emerges

From an end-use perspective, China's recycled aluminum is primarily used in casting and die-casting alloys, serving industries such as automotive, construction, and electronics. Due to limitations in purity and mechanical properties, approximately 70% of recycled casting alloys currently flow into the automotive and motorcycle manufacturing sectors, making them highly sensitive to the health of the vehicle market.

Notably, the new energy vehicle sector has recently become a national priority for regulating market competition. Relevant policies aim to curb vicious price wars and guide the industry toward healthy development. For recycled aluminum enterprises, this presents a double-edged sword: in the long term, an orderly automotive market helps stabilize raw material demand.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.