Tom Bird, executive chairman at Enicor, explains why the free and fair global trade of recycled metal is essential in the development of a robust, resilient, circular supply chain.
As protectionist tariffs, tighter regulation, rising energy prices, and geopolitical tensions disrupt recycled metal supply chains at a pivotal time in the market, a fresh approach is vital to deliver greener, high-quality supplies amid increasing demand.
EU data make it clear that metal recycling, especially aluminium and copper, is highly effective in reducing the environmental and cost impacts of extracting virgin ores. The UK generates more than 11 million tonnes of ferrous and non-ferrous metal for recycling annually.
Currently, between 70 and 80% of this volume is exported, primarily to non-Organisation for Economic Co-operation and Development (OECD) countries like Turkey. However, policy drivers are challenging the efficiency and effectiveness of this ecosystem in ways that could prove damaging in the long term.
Recognising the value of the metals recycling industry
The policy changes we are seeing are largely being driven by recycled metals being regarded less as a commodity and more as a strategic resource that can underpin future investment in domestic production and consumption.
For example, the UK Steel Strategy, which was unveiled by the government in March, sets out a new tariff regime for steel that comes into force from 1 July. It will limit tariff-free steel imports, reducing overall quota volumes by 51% compared to the steel safeguard measure. Any imports above these levels will then face a 50% tariff.
The measure will apply to imports of steel products that can also be made in the UK. It anticipates an up to eight-fold increase in demand for UK recycled steel as cleaner Electric Arc Furnace (EAF) processing comes online and wider measures to support the industry are rolled out.
The strategy states that to fully realise the benefits for EAF-based recycled steel production, the UK needs a resilient, cost-effective and high-quality supply chain. The recycling sector’s ability to innovate and meet emerging demand will directly shape the competitiveness of UK-based steel.
The case for free and fair trade
UK Steel is pushing to curb exports to secure vital recycled metal for domestic green steel production. However, the metals recycling industry is keen to avoid an outright export ban, which research carried out by Sheffield Hallam University for the British Metals Recycling Association (BMRA) has confirmed would devastate jobs and growth in the sector.
Last year’s report from the BMRA on why exporting recycled metal is essential to the UK metals recycling industry revealed that 60% of recycled metal firms rely on exports for more than 75% of their revenue.
While demand for UK steel is expected to increase significantly, driven mainly by the new steel strategy, the BMRA report also highlights that even when planned EAF plants are built in the UK, there will still be around four million tonnes of surplus recycled steel that need to be processed.
When you combine that surplus volume with a lack of infrastructure in the UK for recycling other metals, such as brass and copper, and the fact that there is only one aluminium smelter, then being able to access these capabilities in other countries makes sense.
Beyond access to the processes needed, there are other pragmatic reasons why exports support the long-term viability of the recycled metal sector in the UK, from favourable payment terms to certified quality control and digital traceability. For example, overseas buyers typically pay on the day or prior to loading, compared to payment terms of up to 90 days within the domestic market.
The leading recycled metal collectors in the UK are experts in ensuring the system delivers the best value and quality for customers in the UK, but success depends on being able to operate effectively within a rapidly evolving global system.
Infrastructure availability is core to achieving cost-effective metals recycling and a resilient UK recycled metal industry that works across all metals, including aluminium and copper. It needs to operate across borders to maximise the circular potential of all metals recovered in the UK, be that from packaging, end-of-life vehicles, construction waste, or refinery decommissioning.
Leading players, such as Enicor, offer a vertically integrated model that manages everything from collection to processing and export, minimising wastage and accessing cost-effective end processes that will not only deliver the quality materials the UK needs but do it at the right price.
Overcoming barriers to free and fair trade in metals recycling
Both the US and EU are weighing options to restrict exports of aluminium for recycling as part of the EU’s Steel and Metals Action Plan and the proposed Secure Aluminium Supply Chains Act in the US that would direct the US International Trade Commission to investigate the national and economic security risks posed by US recycled aluminium exports to ‘adversarial’ nations.
Export restrictions drop local prices for recyclers but create severe supply shortages for mills elsewhere. This leads to unviable costs in tariff-heavy markets and forces exporters to seek alternative, less lucrative destinations. This is damaging to a sector that requires significant investment to modernise at pace.
Metals recycling is a maturing sector and one that is increasingly investing in the technologies that will optimise quality and minimise the need for expensive and environmentally damaging primary extraction. Imposing increasing restrictions on trade could choke investment, unnecessarily restrict availability of materials and risk bankrupting the businesses and infrastructure on which the full circular potential of metal relies.
By increasing access to global recycling and processing networks, a free and fair trade in recycled metals will benefit all, helping to reduce costs, improve quality, minimise environmental impact, optimise resource recovery, encourage investment and ultimately create a sustainable metals recycling sector at a time when it is becoming increasingly critical to the future of manufacturing in the UK.
It is vital that the industry, processors, policy makers and end users continue to work together to minimise constraints that could ultimately damage the sector and the availability of a wide range of metals at a point when their strategic importance is finally being recognised around the world.
