The global metal recycling sector is forecast to reach US$ 86.1 billion by 2027, according to a new figures by research firm Reports & Data. Biggest market drivers are the growing desire to cut energy costs and increasing consumer awareness regarding circular products.
‘The metal recycling market is growing due to the high demand for steel and rapid industrialisation and urbanisation in emerging nations, state market analysts. Other factors boosting recycling are the scarcity of rare earth metals and ever more ambitious recycling legislation.
‘Factors that will restrict the global market are the unorganised flow of waste metals and less scrap collection zones,’ analysts note. The increasing cost of raw materials is also hindering the demand along with high labour charges.
Impact of COVID-19
It’s clear to see that the global supply of the recycled metals fell down during the first half of the year 2020 due to the corona virus. ‘Demand plummeted in China, and then the rest of the world as the pandemic led to industries and factories shutting down. It also hit a pause button on consumer spending,’ the report underlines.
The infrastructure sector is not expected to see any growth in the wake of the virus. Meanwhile, consumers all around the world are faced with reduced or lost income. Not least, manufacturers are witnessing an increase in price for copper, steel, and other raw materials. This will likely make recycled metal more appealing compared to virgin metals.
Looking ahead, the metal recycling market is expected to witness a ‘fairly rapid recovery’, FD Report & Data believes. ‘This is possible based on pent-up consumer demand after stay-at-home orders are rescinded.’
However, that scenario is not guaranteed as there is an element of recovery involving not only the return of positive household consumer sentiment but also the ability and willingness of governments around the world to inject money into infrastructure and other public works projects.
Further key findings are:
- Demand for ferrous metal has been high in the recycling industry in recent years. The usage of it in several products are high. For instance, in the year 2018, the recycling rates for ferrous scrap in cars was 106%, for appliances: 90%, for steel cans: 66.8%, for structural steel: 98%, and for reinforcement steel: 70%.
- The dominant end user of ferrous scrap metal was the building and construction industry. It held the largest market share of 35.1% last year. The increased ongoing construction activity all across the globe in the past few years and growing conscious of sustainable development has encouraged the segment’s end users to use more recycled metals.
- The demand for steel was slow in China in the year 2018, but it witnessed a rise in the rest of the world, mainly due to the strong economy of the US. In this region, increased consumer spending, as well as business confidence, led to ‘solid’ product demand, thus boosting the hunger for recycled metals.
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