Log in Subscribe
Garden Guru

The need for more Recycling

Jim Boxberger Jr.
Posted 9/3/21

Last November I wrote about a shortage of aluminum cans and aluminum in general and the shortage is getting worse. A report compiled from CEO reports and Credit Suisse analysts about a shortage of …

This item is available in full to subscribers.

Please log in to continue

Log in
Garden Guru

The need for more Recycling


Last November I wrote about a shortage of aluminum cans and aluminum in general and the shortage is getting worse. A report compiled from CEO reports and Credit Suisse analysts about a shortage of aluminum sheet used for producing cans states that for the most part, the North American can industry is sold out for the next 24 to 36 months and they don’t see the supply chain catching up to real demand until 2026. That prediction has gotten worse as the world economy is waking up from the covid induced haze we have been under. Now in a race to buy more aluminum, Japan is offering aluminum producers a two hundred and thirty dollar per ton premium over market price, now through December. This of course means that others will have to match it or not get all the aluminum they were hoping for. Alcoa is one of the largest aluminum producers and since the time I wrote the November column, Alcoa’s stock price has more than doubled, as they are sold out of all aluminum that they can produce throught 2025 at this point. Early 2020 Alcoa stock was eleven dollars and change, now it is trading at over forty dollars per share, just sixteen months later. As a result of the aluminum shortage, many can foods are simply not available because there are no cans to put it in. We have already been affected by this with many of canned dog and cat foods only available about every other month. Our Ball canning jar lids that were out of stock all last summer, we had to stock up on in January, as they are out of stock again until January 2022 from our suppliers. On the consumer product side of aluminum consumption, Ball has the dominant market share in the U.S. market at 42%, Crown at 25%, Ardagh at 15% and Anheuser-Busch at about 13%, but all their (AB) production is for their own products and that only covers about 50% of their product demand. This product demand has been building for a while now. Solid consumer demand for craft beer, hard cider, hard seltzer & energy drinks have fostered strong growth for new entrants utilizing the aluminum can. Now Ball has introduced their new aluminum solo cup, which they have been advertising heavily with the new Jason Momoa commercials. The number two U.S. producer Crown sells most of their aluminum sheeting to the auto industry which has turned to lighter materials to produce more energy efficient and E.V. vehicles. The U.S. auto industry accounts for a large portion of aluminum consumption particularly Tesla, which has been paying higher prices for aluminum sheet so that they do not have to reduce production. With Tesla meeting production goals for 2020 for the first time in company history, their stock price soared to new records making Elon Musk one of the richest men in the world. But all this aluminum sheet usage has put even more pressure on companies like Ball to pay more for aluminum sheet or go without. This problem is getting worse as the year goes on, with or without coronavirus concerns. So with all this growth why not just build more manufacturing plants? The major can companies have collectively invested around $2.8 billion recently to expand production capacity, according to Credit Suisse, but build-outs and new facilities take time, even more so with covid delays. And consumers want their cans now, and they want them tall and slim, and the current can infrastructure just isn’t built to provide them. A pretty good problem to have if you’re in the aluminum can business, but pretty terrible if you are a craft brewer, cider company or other producer who needs cans pronto. One of the only hopes to stem the shortages are recycling programs that are gaining new traction around the country. Many of the canned products you see on the shelf today have around twenty five percent post consumer waste in their production. Hopefully sometime soon we can get that number to around fifty percent.


No comments on this item Please log in to comment by clicking here