Aluminium is one of the most widely used metals globally due to its lightweight nature, corrosion resistance, excellent conductivity, and high recyclability. As industries increasingly focus on sustainable practices, recycling aluminium scrap into usable ingots has emerged as both an environmentally responsible and financially rewarding venture. The production of aluminium ingots from aluminium scrap is now viewed as a lucrative business opportunity, particularly for startups and small-scale entrepreneurs.

This business model capitalizes on the growing availability of scrap aluminium and rising global demand for secondary aluminium in construction, automotive, electrical, and packaging industries. By setting up a secondary aluminium production unit, entrepreneurs can enter a profitable market while contributing to the circular economy.

Scope of Aluminium Recycling and Ingot Production

The global aluminium industry is transitioning from primary metal production to recycling-based operations. Producing aluminium from bauxite requires significant energy and mining resources. In contrast, secondary aluminium production—through recycling—uses only 5% of the energy required for primary aluminium production and emits fewer greenhouse gases.

See More – Indian Companies Directory

With rising industrial waste, the availability of scrap—such as used beverage cans, automotive parts, window frames, and machining chips—is abundant. Aluminium ingots from aluminium scrap can meet over 35% of the world’s total aluminium demand. This makes aluminium recycling not only sustainable but also strategically important.

Types of Aluminium Scrap Used

The raw materials for producing aluminium ingots from aluminium scrap are readily available in both urban and industrial areas. These include:

• Aluminium utensils and sheets

• Used beverage cans (UBCs)

• Automobile components (wheels, engine parts)

• Construction scrap (doors, window frames)

• Industrial machining chips and swarf

• Electrical cable scrap

Classifying scrap into categories such as clean, contaminated, or mixed scrap is essential for ensuring efficient processing and quality control.

Process of Making Aluminium Ingots from Scrap

Manufacturing aluminium ingots from aluminium scrap involves the following essential steps:

1. Collection and Sorting

The first step is sourcing and sorting aluminium scrap from local dealers, municipal waste handlers, and industrial units. Magnetic separators, sensors, and manual sorting are used to remove non-aluminium materials.

2. Shredding and Pre-treatment

Scrap is shredded into smaller pieces for easier melting. Surface contaminants such as paint, plastic, and oils are removed through pre-treatment processes like thermal de-coating or chemical cleaning.

3. Melting

Clean scrap is fed into a high-efficiency induction furnace or rotary furnace. Melting occurs at about 660°C. During this process, fluxes are added to remove impurities and improve metal quality.

4. Degassing and Alloying

Inert gases such as nitrogen or argon are used to remove dissolved hydrogen and other impurities. Alloying elements like silicon, magnesium, or copper can be added depending on customer requirements.

5. Casting into Ingots

Molten aluminium is poured into ingot moulds, cooled, and solidified. Ingots are then removed, cleaned, and packed for storage or delivery.

Machinery and Infrastructure Required

Setting up a small-to-medium-scale unit for aluminium ingots from aluminium scrap requires the following infrastructure and equipment:

• Shredders and sorting machines

• Rotary or induction furnaces

• Pre-treatment units (de-coating, drying, filtration)

• Ladles and crucibles

• Ingot casting machines

• Pollution control systems (fume extraction, filters)

• Material handling equipment (conveyors, forklifts)

An average plant processing 1–5 tons of scrap per day will require a land area of around 500–1,000 square meters, with an investment of ?80 lakh to ?2 crore depending on capacity and automation level.

Investment Overview and Project Economics

Starting a plant for aluminium ingots from aluminium scrap can be a capital-efficient opportunity. Below is an indicative cost structure:

Capital Investment:

• Land and building: ?25–40 lakh

• Machinery and equipment: ?50–70 lakh

• Working capital (3–6 months): ?30–50 lakh

• Total investment: ?1.2–1.5 crore for a small-scale unit

Operating Costs:

• Scrap procurement: 60% of total costs

• Energy and fuel: 20%

• Labor and maintenance: 10%

• Packaging, logistics, and overheads: 10%

Profitability:

• Selling price of aluminium ingots: ?220–250/kg (subject to purity and alloy)

• Gross margins: 20–30% possible

• ROI: 30–40% achievable

• Break-even period: 2–3 years

Demand for secondary aluminium is growing, and with strong scrap sourcing, plants can achieve high utilization and consistent profits.

Market Trends Driving Aluminium Ingot Business

Several factors are fueling the rise of aluminium ingots from aluminium scrap:

• Rising metal prices: Primary aluminium is becoming expensive due to energy costs and supply chain issues.

• Government policies: Initiatives promoting recycling, such as the Swachh Bharat Abhiyan and the EPR framework, encourage scrap utilization.

• Green manufacturing: Companies are shifting to recycled metals to meet ESG and carbon neutrality goals.

• Export demand: Countries like China, UAE, and the USA import aluminium ingots made from recycled sources due to cost and environmental benefits.

Applications of Aluminium Ingots

Aluminium ingots produced from scrap have applications across diverse sectors:

• Automotive: Engine parts, transmission cases, wheels

• Construction: Window frames, doors, cladding panels

• Electricals: Bus bars, cable sheathing, conductors

• Consumer Goods: Cookware, appliances, electronics casing

• Packaging: Foils, cans, containers

Custom alloying allows flexibility in serving multiple industries, adding value to the business model.

Environmental and Compliance Benefits

Producing aluminium ingots from aluminium scrap supports environmental conservation and sustainability goals. Benefits include:

• Energy savings: Uses only 5% of energy compared to primary metal production

• Pollution reduction: Fewer emissions and reduced landfill waste

• Carbon credits: Potential to earn credits through clean manufacturing

• Compliance: Fulfills ESG requirements, ISO standards, and green building norms

Furnace fumes, if treated with proper pollution control systems, ensure clean operations and permit acquisition from state pollution boards.

SWOT Analysis

Strengths:

• Low raw material cost (scrap is cheaper and abundant)

• High energy efficiency

• Large and growing market for recycled aluminium

Weaknesses:

• Scrap price fluctuation can affect profit margins

• Quality variation in scrap may lead to inconsistent ingot purity

Opportunities:

• Rising global demand for secondary aluminium

• Export potential to eco-regulated markets

• Integration with machining and die-casting units

Threats:

• Import of cheap aluminium ingots

• Competition from large-scale recyclers

• Volatility in metal prices

Government Support and Incentives

Entrepreneurs setting up a plant for aluminium ingots from aluminium scrap can avail several schemes and incentives:

• MSME loans under CGTMSE or PMEGP

• State Industrial Subsidies for green recycling units

• Capital subsidy under the Sustainable Manufacturing Program

• Custom duty benefits on pollution control and energy-saving equipment

• Carbon credit eligibility for emissions saved

Obtaining assistance from financial institutions like SIDBI and NSIC can ease credit access and technical consultation.

Business Expansion Possibilities

Once a stable ingot production setup is in place, startups can explore:

• Die casting of automotive components

• Production of aluminium alloy billets and rods

• Custom aluminium profiles for construction

• Foil and sheet rolling units

• Joint ventures with extrusion and fabrication companies

Diversifying into forward-integrated products enhances profitability and market control.

See More – Modern Printing Technology

Conclusion

The manufacturing of aluminium ingots from aluminium scrap is not just a business; it is a sustainable investment in the future. With high market demand, growing environmental awareness, and a favorable policy environment, secondary aluminium production provides startups and entrepreneurs a cost-effective, scalable, and impactful opportunity.

By combining modern recycling technologies with strong sourcing networks and customer relationships, businesses can create a robust presence in this evolving industry. Aluminium recycling not only saves money and resources but also plays a critical role in building a circular economy.

Contact Us