“The Aluminum Can Wars Begin” — Wall Street Journal, 25 September 2012

In 2009, in a joint effort, aluminum companies Alcoa and Novelis decided to centralize their aluminum can collection. In 2011, the two companies accumulated 40 billion cans. However this past August, in order to start its own collection program, Novelis split from Alcoa. Both companies are now at war, trying to out-collect the other.

In Novelis’ new program, the company wishes to collect 60 billion cans by 2015. Through a solo program, the company will have full autonomy and be able to increase its aluminum purchases. Novelis also wants to increase its scrap sources to 80% by 2020, which would be a 35% boost.

Alcoa and Novelis are sizably different companies. While Alcoa produces mass quantities of primary aluminum, Novelis only has one smelter located in South America. Novelis largely depends on other companies for its raw aluminum supply, and will now have to become more adaptable in how it obtains scrap metal.

According to the Aluminum Association, “manufacturing cans from recycled aluminum uses 95% less energy than manufacturing them from raw materials.” Alcoa is looking to increase its collection numbers by implementing new technology: vending machines that give cash or credit for Used Beverage Cans (UBC). Alcoa is also looking into increasing the number of recycling bins in large communities, like apartment building and condominium complexes.

While Novelis and Alcoa duel over collection schemes, scrap yards remain the best and biggest cumulative source of UBCs. Scrap yards gather and sell almost 40% of recycled UBCs.

The question to answer: will Novelis’s and Alcoa’s new collection methods positively affect the US’s recycling rate? Although, time will tell , however, we are betting that it will affect positively.

Conceived, Developed and Written by Dr. Subodh Das and Tara Mahadevan

October 25th, 2012

Phinix LLC

Copyright 2012. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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One thought on ““The Aluminum Can Wars Begin” — Wall Street Journal, 25 September 2012

  1. Dear Sir,While reading your note above I could recollect my memories of sixties when ALCOA & ALCAN were trying to cut down their production cost by recycling of Al. In fact there is no restriction for primary producers in recycling the secondary Al & Al-alloys, still there are three basic problems associated with the implementation as given below;
    i) Stocking the cans (as cheap raw material) require huge space & risk of fire.
    ii) Accumulating direct & indirect cost.
    iii) Scope of primary metal contamination can not be ruled out, with alloying metals present in cans even attachments are removed and dry cans are used selectively.
    iv) Natural resistance from secondary producers & the price of cans subsequently..
    Besides above I have another suggestion of bulk recycling if you permit me to explain further!
    Thanks

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