For well over a year the sum offered for used aluminium cans by reprocessor Novelis was 650 per tonne for loose and 700 for baled. But, since November 2005 the company has steadily increased its prices.
The company has now said it will offer 900 for loose cans and 950 for cans that have been baled. The new prices come into effect this month (February 2006).
The company believes its new price should have local authorities and waste management companies scrambling to collect as many aluminium cans as possible.
The price increase has come on the back of strong demand for aluminium on the global market. As with other recyclable materials, the Asian economy is particularly driving the demand for metals.
John Gardner, vice president of communication at Novelis, said the increase in aluminium prices had come more suddenly than price increases in other recyclable materials driven by the Chinese market.
He said: “Other commodity prices have been affected for the last 18 months. There has certainly been less activity in the aluminium market over the last two years.”
Targets
As a major producer of raw materials for the packaging industry, Novelis also has an interest in increasing the UK recycling rate for aluminium packaging waste – to help meet the European Packaging Directive targets set for 2008.
Mr Gardner said there had been a good response to the first two price increases over the winter months, which led Novelis to believe increasing the price further would have even more of a positive response.
“The prices we are seeing offer a very good income – baled at 950 is very attractive and makes recycling aluminium cans a very profitable venture,” said Mr Gardner. “In the last two rises we have seen evidence that the higher price is a further incentive to collect and we expect the same again.”
Novelis runs Europe's only recycling plant dedicated to the recycling of used aluminium beverage cans, at a site in Warrington. After expansion work last year, the plant can now recycle up to 120,000 tonnes of cans every year, although a large proportion of the cans processed are currently brought in from abroad.
Mr Gardner said that increased collections following the earlier price hikes had justified the investment in increasing the Warrington plant's capacity.
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