The two companies announced on Wednesday a three-year deal for the supply of 75,000 tonnes of high-quality, pre-sorted, end-of-life aluminium scrap for use in the production of aluminium sheets for the automotive industry.
The scrap will consist of two proprietary TSR products: TSR130 and TSR136.
“They consist of very specific alloys with pretty tight specifications, made from 100% post-consumer scrap. We have very strict quality management in place,” TSR chief operating officer Denis Reuter said.
“TSR136 in particular was designed as a sustainable P1020 substitute. We designed it with billet producers in mind, and it will allow them to decarbonize to a great extent,” Reuter said.
The fact that the input material of the scrap is post-consumer, or end-of-life, is important for two reasons.
The first relates to the carbon footprint of the scrap. While there is no industry-wide consensus, much of the industry ascribes different footprints to production and post-consumer scrap, with end-of-life material conferring a lower carbon footprint than production scrap that has not served a life, so to speak. Reuter said this was a factor in TSR’s decision to only use post-consumer material when producing these scrap grades, to maximize the decarbonization achieved by using them.
The second is availability. Wrought aluminium alloys are not tolerant of contaminants, so producers prefer production scrap, which is pure and clean because it has not entered the lifecycle of consumer goods. But scrap availability is limited, so the industry is increasingly looking at harder-to-utilize sources including shredded end-of-life scrap.
Because end-of-life scrap, particularly from vehicles, is typically shredded, the resulting material contains not only non-aluminium impurities but also aluminium alloys that are undesirable in wrought alloy production, such as casting alloys.
As such, much of the shredded post-consumer scrap is consumed in Europe by secondary alloy producers for making cast alloys, which are more tolerant of contaminants or is exported.
“We need partners like TSR to be able to extract scrap from material that very often is downcycled [into cast alloys] or, worse, exported,” Alex Gellert, director of metal procurement at Novelis Europe, told Fastmarkets.
Novelis is aiming to reach an average recycling content of 75% across its products by the end of 2030, the company announced the week before.
Gellert also said that the structure of the TSR deal was significant and highlighted Novelis’ commitment to decarbonizing. “It’s a game-changer. The scrap market very often sees opportunistic, short-term deals. This is a long-term agreement; it’s quite innovative and shows this is a long-term strategy.”
TSR was striving to contribute its fair share to supply chain resilience, Reuter said.
“It’s not just about the quality of the scrap, we can make sure it’s clean in other ways too, human rights for example. By sourcing here in Europe and by trying to keep it here in Europe, by guaranteeing the supply chain is clean, we can contribute not only to decarbonization but to supply chain resilience as well,” Reuter said.
TSR currently produces TSR130 and TSR136 at its Moerdijk facility in the Netherlands, which has a capacity of 120,000 tonnes per year. The company is also about to start producing the grades at a new site in Hildesheim, Germany, where it is currently performing testing and awaiting final permits, which it expects in the next two to three weeks.
Hildesheim will have an eventual total capacity of 150,000 tonnes per year, although initial output will be closer to 60,000 tonnes per year.
“We also have other existing facilities in mind that we can adjust or upgrade to also deliver these grades in the future,” Reuter said.