The popularity of aluminum is rising: it will be driven by recycling

Aluminum is one of the most popular metals and is used in many industries such as engineering and construction, or for automotive parts and packaging materials. It is an excellent material and suitable for several applications. And it appears that it is becoming popular right now, despite being used for several decades. David Bečvář, the MTX Group Director for Strategy and CEO of AL INVEST Břidličná, has walked us through aluminum production and recycling.

After iron, aluminum is the second most widely used metal in the world, but still by a large margin. While global production of “primary aluminum”, i.e., aluminum produced (mainly) from extracted bauxite ore, currently exceeds 100 million tons per year, the global volume of iron production, which is mainly used for steel production, is an order of magnitude higher, i.e., over a billion tons per year. However, this shows the real potential of aluminum. Although it cannot replace steel in all cases, it is becoming increasingly popular and could eventually become as popular as steel one day. Aluminum has one advantage and one disadvantage in this regard. It is the third most common element in the Earth’s crust, so it might appear abundant. On the other hand, it is not pure aluminum, and mining it from bauxite ore, its predominant source, is quite energy-intensive, which affects its price as well as its carbon footprint. The largest aluminum producers include China, Australia, Russia, and India, but also nations of the Middle East, Africa and, perhaps somewhat surprisingly, countries such as Norway and Iceland, although their share of global production is minimal. “Aluminum production is nothing unusual and takes place practically all over the world. But, in the Czech Republic, we do not produce this metal. We therefore buy primary aluminum,” says David Bečvář, MTX Group Director for Strategy and CEO of AL INVEST Břidličná, which specializes in the production of foil and other aluminum products.

David Bečvář

He has been with MTX Group since 2016, as Product Director and Director of Acquisitions, and has contributed significantly to the strategic development of the group. Besides, he is the CEO of AL INVEST Břidličná and the group’s foremost aluminum expert.

“We import aluminum mainly from Africa and Russia, but, if necessary, we can provide alternative supplies, which has already proven useful in the past,” Bečvář explains, noting that the global aluminum market is extensive and relatively well interconnected. “African aluminum is ‘purer’, but Russian aluminum is a little cheaper for us, since it is closer to the Czech Republic, and the cost of transport also significantly affects the price of primary aluminum.” He suggests buying aluminum is a complicated process with several variables. “You need to play with those resources a little,” Bečvář says with a smile. However, MTX Group has extensive experience in solving this equation, so the group buys aluminum through META- LIMEX both for its own use and for any other consumers in the Czech Republic. According to Bečvář, MTX Group itself consumes about 35,000 tons of primary aluminum, 25,000 tons of aluminum semi-finished products (rods), and a further 15,000 tons of aluminum scrap for recycling. Aluminum recycling has gained a lot of traction recently. That is because it can be recycled easily. Approximately 75% of produced aluminum is circulating, and this number could be even bigger. “The aluminum processing industry is now focusing a lot on recycling, as it should fundamentally help reduce the carbon footprint of final products, which is what our customers are asking for today,” Bečvář explains.

Aluminum (Al)

Aluminum is a non-magnetic forgeable and ductile metal of whitish-gray color and about three times lighter than steel. It is very easily machined. In its natural form, it is most commonly found in the form of compounds, mainly in bauxite, which is a typical aluminum ore. It is an exceptionally good electrical conductor, is corrosion resistant and easy to recycle. For industrial use, aluminum was “discovered” in the nineteenth century; its wider application was made possible by the invention of electrolytic aluminum production, known as the Hall-Héroult process.

Aluminum

Photo: Barbora Mráčková

Recycling is science

Primary aluminum production, depending on the country and method, emits between 6 and 14 kilograms of CO2 per kilogram of product. In comparison, recycled aluminum emits only 1.6 kilograms of CO2 per kilogram of product. This shows how energy-intensive the production of aluminum is compared to “just remelting it”. And of course, the energy mix in the country of production and transport also come into play. Aluminum can be easily recycled at the same place where it is consumed, thus avoiding long journeys. “I believe that local production can significantly lower emissions and carbon footprint. Most of our production is consumed in Europe,” Bečvář explains, adding that he sees the local industry not only as a livelihood, but also as an opportunity to reduce its carbon footprint. “If we would not produce anything in the Czech Republic, it would not only mean financial problems, but above all, as a country, we would lose the opportunity to change our carbon footprint,” the director reflects. Bečvář says that recycling is a wonderful opportunity for local producers, MTX Group firms (specifically AL INVEST Břidličná and Strojmetal). “Of course, aluminum waste is generated here, so why not process it? The more we use it and the less we have to import primary aluminum, the smaller the carbon footprint of our production will be,” Bečvář says, adding that customers are starting to demand products with a low carbon footprint. “For example, food companies want aluminum packaging to become part of the circular economy, and essentially turn this waste into new packaging,” explains the director of AL INVEST. According to him, however, there are a few major pitfalls. One of them is the collection of aluminum waste. “The lids of yogurt pots typically end up in mixed waste, but they could be easily recycled, too,” says Bečvář. He sees another pitfall in the variety of aluminum materials. “An aluminum can, which is also made of two different aluminum alloys, is an entirely different story from the lid of a yogurt pot.” He outlines that for perfect waste processing, carefully sorting waste or using other procedures to remove various additives from the material is necessary. “When you melt the can, you get an alloy that cannot be used either for the body or the lid.” Bečvář explains how aluminum alloys differ even though the proportion of added elements (known as alloying elements) is just a few percent. However, this does not mean that such material cannot be used. On the contrary, it can be readily applied. “It can be used, for example, in forging pieces produced by Strojmetal,” Bečvář explains. However, he says this does not meet the expectations of some customers that the aluminum would “circulate” in the products they use. “This is something that the aluminum processing industry must resolve by itself. We cannot pass this on to the customer,” Bečvář suggests, adding that the recycling details should not place a burden on the end customer in any way. In essence, it is important to obtain the consumed aluminum for recycling. In many places in the Czech Republic, in addition to the standard bins for plastics, paper and glass, there are also containers for metal waste, where aluminum belongs, or aluminum waste can be handed over at recycling centers. Both aluminum recycling methods will help significantly. “Basically, it is important to get as much of the raw material back as possible. We will deal with the rest,” Bečvář notes, encouraging people to sort aluminum from mixed waste. AL INVEST is looking for ways to use recycled aluminum even in products for which it is currently not suitable. “We are developing a procedure to purify the recycled material of unwanted elements to obtain an essentially pure aluminum that will be similar to the primary aluminum. We will then add in alloying elements as needed to suit a specific application,” he says, indicating the way in which the company is going. This direction has already had some concrete results. “We are working with our partner on the first prototype of a filter that will allow us to clean the materials,” continues Bečvář, adding that the company is a global leader in this regard. “In addition, we are already able to produce packaging material that contains 20 percent recycled material. This is a small victory right now because in the past we could only do up to five percent,” says Bečvář. However, such packaging is made from carefully sorted waste, and one very specific and relatively clean source of aluminum is used: electrical wire. In the future, the company wants to move away from this aluminum recycling method. “It is not just about recycling,” Bečvář suggests that the process of reducing the carbon footprint, which is currently an important topic, is much more complex, and significantly linked to the productivity and efficiency of production and non-production processes and their energy demands. “Customers are looking at the carbon footprint of the entire product, not just parts of it. Ultimately, they don’t care where the excess carbon footprint is created, be it in our country or somewhere else. It is about minimizing it,” says the AL INVEST Břidličná director.

Photo: Barbora Mráčková

Different kinds of footprints

Bečvář has reservations about one particular example of carbon footprint reduction. “From a government official’s point of view, the best way to reduce your carbon footprint is to close your factory. But that does not solve the problem; it just moves it elsewhere and creates unemployment,” he says about quick and easy solutions. The AL INVEST CEO also points out an interesting paradox. When you set up a new recycling plant in the factory, it is actually bad for the environment, from the government’s standpoint. “The recycling plant is something new that needs to be built, resulting in a large carbon emission,” Bečvář says, shaking his head. “But the carbon footprint, those emissions, will not stop at the municipal, regional, national or even European border,” he reflects. And he gives one specific example: “When I look at the carbon footprint of products from the AL INVEST Břidličná factory, I see that our process accounts for only about 30%. The rest comes from the production of the input material and from transporting it. If we only address our own processes, we can only reduce the footprint by those 30%, which is far below the overall potential”. However, this certainly does not mean that AL INVEST or other companies in the MTX Group avoid reducing their carbon footprint. Actually, the opposite is true. Each year, the group heavily invests in this area. “For example, we will try to partly power our plants with solar panels and other renewable sources,” Bečvář says, describing his plans. But he also points out that some solutions cannot be quick and simple. “Given the current energy mix in the Czech Republic, it is more environmentally friendly and economically viable for us to use natural gas for melting aluminum alloy,” he explains. Bečvář says that transitioning to electric furnaces would only make sense if the energy mix was significantly cleaner. Despite the group‘s investments, it still cannot supply clean energy on its own. “We are an energy-intensive process, but on the other hand, we are not a power plant.” Bečvář suggests that the group cannot (at least for now) resolve the power problem. He says solar panels cannot produce enough power to meet the group’s demands. But he agrees that reducing our negative impact on the planet and the environment is the way to go. “I must emphasize once again, however, that it is important to approach this problem as the complete life cycle of a product, which includes its service life and disposal. Not just as one thing at one place,” he says. This is the direction and philosophy to follow, according to Bečvář. “Most of our partners and customers understand it this way, but it should also be aligned with how the authorities see it. It makes no sense to subsidize projects that will reduce production in one place and transfer it somewhere else, where European legislation cannot see it,” says Bečvář. He believes this shift in thinking about the problem might already be happening throughout Europe. “I believe the technical side of things will complement the political one in such a way that they make sense together,” he says, optimistically. This applies to any industry, not just aluminum processing.

Photo: Barbora Mráčková

David Bečvář

Photo: Barbora Mráčková

MTX Group through the eyes of David Bečvář

David Bečvář sees its diversified portfolio, which the group is trying to continue to expand, as its largest asset. For example, MTX Capital Services has been relaunched as a new company offering hedging on commodity markets. But the firm also has a completely new project. “We are making intensive efforts to diversify and look for synergies, especially in management and services,” says Bečvář. He believes the past year has clearly shown that diversification is the right way to go. “Although we have seen a decline in some areas, we have been successful in others,” Bečvář explains. The group does not depend on a particular industry, which he believes will be beneficial during the upcoming boom. The growing demand is stratified into multiple areas, which allows the group to respond better to any situation.

Global, yet local

He thinks carbon footprint should be reduced, even as the group’s aluminum product portfolio, which is already very wide, grows. The group uses aluminum mainly to manufacture car chassis parts, sheets, foil and packaging. “We have a number of interesting and quite unique applications. For example, we manufacture special foils for coolers and special thin foils for packaging, be it for the food industry, cosmetics or pet food,” Bečvář says about the portfolio. Besides the automotive and food industries, our products are also used in construction and mechanical engineering. “In 2018, we started to relocate our aluminum plate manufacture from the plant we purchased in Austria to Břidličná,” he says about one of the recent changes in the company. However, production has not been relocated to be more local, as discussed before, but because there was no potential for further growth and development in the location of the Austrian plant. “We did not come to an agreement with the landowners and could not further expand the plant. Therefore, we decided to relocate. We managed to fully launch production at the new location this year and basically returned as a renewed manufacturer of aluminum plates,” says Bečvář. These plates are used in production lines and their technological features in the food, pharmaceutical and other industries. “This product is made from almost 100% recycled material,” notes Bečvář, coming back to our previous topic. He also believes license plates can be manufactured using recycled materials. Although MTX Group factories manufacture mainly locally, they are major European players. This is especially true for Strojmetal Aluminium Forging, which specializes in aluminum chassis parts. “Even though Strojmetal only manufactures products in Europe, it is one of the top three global chassis parts manufacturers,” Bečvář explains. He says clients all around the world come to Strojmetal for their upper arms of the front axle. In addition to European car manufacturers such as Mercedes-Benz or Audi, its products are shipped to the USA. “We ship supplies from the Czech Republic to Ford, for example,” Bečvář says. He also admits it is possible the company will build a plant in the US. “Given the current shipment volume, it does not make much sense financially. We have calculated that we would need three new production lines there. It would be like moving one third of Strojmetal to the States,” Bečvář explains. However, Strojmetal does not yet have such a high demand there, nor in the neighboring countries, so the investment is only a theory for now. But the situation may change, he said. It does not only depend on the demand there but also on American rules for such production. So far, the US government is not preventing car manufacturers from shipping parts from Europe, but it might eventually pressure them into producing more parts locally. “This is not happening yet, and we are constantly monitoring the situation. We understand that there is pressure to localize production, but it would not be economically viable for us yet. If there is a change, we are ready to react, but we are not taking any steps in this regard at the moment,” Bečvář explains. And he is not afraid that the competition might react faster. “We have a high level of expertise in the area, and it is always easier for clients to work with someone who has more experience. In the USA, aluminum forgings are not used in the automotive industry nearly as much as in Europe, so they lack that experience we have, in a way. At Strojmetal, we also help car manufacturers with the development of these parts, and this overall package of services is not easily replaceable. A new supplier would not have it easy at all,” says Bečvář with certainty. “Just because someone can forge steel doesn’t mean they can forge aluminum as well. It’s not something you learn overnight,” he says with a smile. Other relatively unique products come from the AL INVEST Břidličná factory. “About half of all trucks in Europe have fuel tanks made of AL INVEST sheet metal,” he explains, adding that the company is constantly moving forward in this regard. Instead of just supplying sheet metal, last year the company built a new robotized laser workplace, which manufactures burnouts in any desired shape from sheet metal. These are used directly for fuel tank manufacture, so we have managed to increase the added value of the product. “I also estimate that about a third of European cooler manufacturers use our foil,” Bečvář boasts. He says food packaging is manufactured locally. Even though AL INVEST Břidličná manufactures about 10,000 tons of aluminum packaging each year, which might seem like a large number, the European market consumes around 1,500,000 tons of this packaging each year. “We are an important supplier in our region, but this sector is very fragmented, because transport plays a crucial role in the price of packaging,” Bečvář explains. Packaging materials are therefore not transported far away, which also contributes to reducing the aforementioned carbon footprint. “The aim is to serve customers around the corner, so to speak,” Bečvář concludes discussion of the topic.