India aluminum recyclers urged to prioritize supply security amid scrap disruptions

Indian secondary aluminum producers should diversify sourcing and prioritize supply security as geopolitical tensions, export restrictions and shifting trade policies increasingly disrupt global scrap flows, industry participants said at a metals event in Mumbai Aug. 12.

Indian buyers may also need to move away from lean inventory strategies and hold larger scrap inventories to protect against supply disruptions, according to the panelists at the Global Commodity Conclave.

India is the world's second-largest aluminum producer after China, but it also relies on imports for around 85% of its aluminum scrap requirements, according to India's Ministry of Mines and market participants.

The industry call came as India's secondary aluminum sector faces growing uncertainty over feedstock availability following scrap export restrictions in the UAE and proposed measures in Europe aimed at retaining more recyclable material within the region.

Jawed Ahmed, founder and CEO of Al Qaryan International DMCC, said geopolitical disruptions were forcing suppliers and consumers to diversify away from single-country dependencies and to rethink established trade routes.

Buyers that previously relied heavily on supply from countries such as the UAE and Saudi Arabia are increasingly seeking alternative sources to secure material, he added.

Panelists at the event said supply security rather than price alone was increasingly driving procurement decisions.

UAE's volumes hard to replace

UAE restrictions are already affecting India's aluminum extrusion sector, which has traditionally relied on scrap imports from the Gulf nation, according to Vikram Jhunjhunwala, managing director of Century Extrusions.

India may have to source more scrap from the US, Australia and other markets, but replacing the volumes historically supplied by the UAE will not be easy, he said.

"So that is why there is a shortage of aluminum scrap extrusion industry" in India, Jhunjunwala said. "At the moment, I do not find any solution to this because other countries also are looking forward for these kind of restrictions."

India accounted for 66% of UAE's aluminum scrap exports under HS Code 7602 in 2025, according to S&P Global Market Intelligence's Global Trade Analytics Suite.

Ahmed said the current restrictions seen in the UAE may ultimately evolve into a broader trend across the GCC, with countries increasingly seeking to retain scrap and recyclable materials domestically as strategic resources. While local recycling capacity remains insufficient to absorb all available material today, Gulf countries could expand domestic value addition and downstream industries over time, he said.

Europe weighs restrictions

Europe, another key supplier of aluminum scrap to India, is also considering measures to boost domestic recycling and decarbonization, including a proposed 15% export levy.

Pratik Jha, director at European Metal Recycling Marketing India, said the proposed measures should be viewed as part of a broader industrial policy shift rather than solely an environmental initiative. The EU move could tighten scrap availability globally, he added.

The EU exported about 1.3 million mt of aluminum scrap under HS Code 7602 in 2025, with India accounting for about 30% of that volume, according to GTAS.

To mitigate supply risks, Indian recyclers should broaden their supplier base and look beyond traditional sourcing regions, including South America and Australia, while maintaining stronger long-term relationships with suppliers, Jha said.

He also said the industry's traditional lean inventory model may no longer be sufficient and suggested buyers consider holding inventory equivalent to three to 3 1/2 months of requirements. Indian buyers should shift from being price-sensitive to strategic buyers, Jha added.