.Prices for used aluminum cans in the U.S. have fallen about 30% since last summer. Old cans are less versatile than other scrap. The makers of airplane and car parts prefer not to use aluminum made from recycled cans. More new cans in the U.S. are made from imported aluminum. “We’d prefer to purchase domestic can sheet, but as of right now there is not enough to supply the domestic market,” said Jamie Westfahl, senior director of global packaging procurement for Denver-based brewer Molson Coors Brewing Co.
roducing aluminum for cans isn’t as profitable as rolling sheet for car companies. Aluminum rolling mills are paid about $1 a pound above the market price for the raw-aluminum ingots they use to make auto-body sheet, compared with about 35 cents a pound for converting can sheeting.
The challenging economics is a troubling sign for food and packaging companies that are facing pressure to embrace recycling. The glut of used cans shows how public calls for using more recyclable materials can fall short if companies decide it isn’t profitable enough to remake them into new products.
Other recycled materials are facing similar problems. Scrap paper and plastic prices have collapsed since China imposed higher standards on the purity of those products imported from the U.S. China implemented tariffs of 50% last year on aluminum scrap from the U.S. That has created a glut of shredded scrap from junked cars in the U.S. to mix with the growing stockpile of discarded cans.
Atlanta-based Novelis Inc. has shifted some production in recent years from cans to making more aluminum sheet for vehicle bodies. The company opened new lines for auto sheet at a plant in Oswego, N.Y., and is building a plant to make automotive aluminum in Guthrie, Ky. “We’ve done it. Our competitors have done it,” Novelis Vice President Andy King said. The company also recently increased production from its remaining can-sheet lines as demand for cans improves.
Arconic is investing $100 million at one of its plants to shift production from can sheet to automotive and industrial aluminum. The company stopped making can sheet at the end of last year at the plant near Knoxville, Tenn., that accounted for 14% of the aluminum used in beverage-can bodies and was a major consumer of discarded beverage cans