Aluminum Scrap Recycling in India: Process, Value, and Why It Matters

Updated: May 03, 2026 · 17 min read

India’s Budget 2024-25 raised the basic customs duty on aluminium scrap imports from zero to 2.5% — a seemingly small adjustment that sent an unmistakable signal: the government wants domestic scrap collection to fill the gap, not cheaper imports. For plant managers sitting on accumulated turnings, sheets, and castings, the timing is ideal. Domestic aluminium scrap prices are firm, secondary smelters are actively chasing supply, and compliance obligations — while real — are manageable with the right partner. What follows is a ground-level account of how aluminium scrap recycling in India actually works: the grades, the process, the price mechanics, and the regulatory obligations you cannot afford to miss.

Why Aluminium Scrap Commands a Price Premium in India’s Scrap Markets

Aluminium is the only major metal that can be recycled repeatedly without any degradation in metallurgical properties. That physical fact has a direct financial consequence: secondary aluminium (produced from scrap) costs a fraction of primary aluminium (produced from bauxite via the Bayer and Hall-Héroult processes). The energy saving is quantified at up to 95% — a figure published consistently by the International Aluminium Institute and reflected in the cost structures of every secondary smelter operating out of Rajkot, Bhiwadi, and Kolhapur.

This energy arbitrage is the bedrock of scrap value. When LME aluminium hovers around USD 2,300–2,500 per tonne (as it did through much of Q4 2025 and Q1 2026), Indian secondary smelters can pay ₹105–₹155/kg for clean scrap and still operate at margins that primary producers cannot match. For the industrial seller — an auto-component manufacturer in Pune, a window-fabrication unit in Ahmedabad, or a defence contractor in Hyderabad — this translates into meaningful recovery value on what would otherwise be a waste-management cost.

India’s per-capita aluminium consumption has grown from under 2 kg in 2010 to approximately 3.5 kg in FY 2024-25, still well below the global average of roughly 11 kg, meaning the growth trajectory — and therefore the scrap generation trajectory — has years to run. The NITI Aayog’s circular economy framework explicitly identifies secondary aluminium as a priority material stream, and the Ministry of Steel‘s National Steel Policy analogue for non-ferrous metals sets a clear preference for domestic scrap utilisation over imports.

Grades of Aluminium Scrap and What Each Is Worth in 2026

Not all aluminium scrap is created equal. The grade — determined by alloy composition, contamination level, form factor, and whether the material is painted, coated, or mixed — directly determines the price a buyer will offer. Misrepresenting grade, or simply being unaware of it, is the single most common reason industrial sellers leave money on the table.

Common Aluminium Scrap Grades in the Indian Market

Grade / Type	Description	Indicative Price Q1 2026 (₹/kg)	Typical Source
Taint / Tabor (Pure Extrusion Scrap)	Clean, uncoated 6xxx-series extrusion offcuts; no inserts	₹140–₹155	Window / façade fabricators
Cast Aluminium Scrap	Engine blocks, transmission housings; high Si content	₹115–₹135	Auto-component manufacturers, foundries
Aluminium Turnings / Borings	Machining swarf; may contain coolant oil — requires degreasing	₹105–₹120	CNC machining, precision engineering plants
UBC (Used Beverage Cans)	Post-consumer cans; 3xxx/5xxx alloy, high recovery rate	₹110–₹130	Beverage facilities, waste aggregators
Painted / Coated Sheet	Roofing sheets, signage, lacquered panels	₹100–₹118	Construction demolition, advertising firms
Aluminium Dross	Oxide-rich residue from smelting; classified as hazardous waste	₹18–₹35 (treated as by-product)	Secondary smelters, die-casting units

Prices above are indicative for Mumbai/Pune/Ahmedabad yards in Q1 2026 and are indexed weekly to London Metal Exchange (LME) cash settlements. Buyers typically apply a discount of ₹10–₹25/kg to account for yield loss, logistics, and processing. Sellers who present material pre-sorted and documented consistently achieve the upper end of each band.

The Aluminium Recycling Process: From Yard to Ingot

The aluminium recycling process is considerably more technically demanding than simply melting down old cans. Understanding each stage helps sellers appreciate why buyers penalise contaminated or mixed loads — and why grade segregation at source is worth the effort.

Stage 1: Collection and Sorting

Material arrives at the recycling yard either self-delivered or via pickup. Trained sorters use visual inspection, density checks, and increasingly, handheld X-ray fluorescence (XRF) analysers to separate alloy families (1xxx, 3xxx, 5xxx, 6xxx, 7xxx series). Mixed loads are processed at a yield discount. Our non-ferrous metal recycling service uses XRF verification to ensure accurate grade identification before any price is offered.

Stage 2: Pre-Processing — Shredding, Decoating, and De-oiling

Painted or coated scrap undergoes rotary kiln decoating at 450–500°C — hot enough to combust organic coatings, cool enough to avoid aluminium oxidation. Turnings and machining swarf pass through centrifugal de-oiling units to recover cutting fluids (themselves a secondary revenue stream) before the aluminium enters the furnace. This step is non-negotiable: oil contamination above 2–3% by weight causes furnace dross to spike and metal yield to collapse.

Stage 3: Melting and Refining

Clean scrap enters reverberatory or induction furnaces at 680–750°C. Salt flux is added to separate oxides and non-metallic impurities, producing two outputs: molten aluminium alloy and dross. The molten metal is then alloyed — silicon, magnesium, copper, and manganese are common additions — to meet the customer’s specification. Secondary aluminium ingots produced at this stage typically meet IS 617 or IS 21000 specifications published by the Bureau of Indian Standards (BIS).

Stage 4: Casting and Despatch

Refined aluminium is cast into ingots, billets, or wire bars. Secondary smelters in clusters like Rajkot (Gujarat) and Bhiwadi (Rajasthan) supply these to auto-component foundries and extrusion plants. The entire cycle — from scrap delivery to ingot despatch — typically runs 5–10 working days at a well-equipped secondary smelter.

The Regulatory Framework Every Seller Must Know

Aluminium scrap sits at an interesting regulatory intersection. For most clean, uncontaminated grades — extrusion offcuts, clean cast scrap — the compliance burden is modest. But the moment a seller generates aluminium dross, oil-contaminated turnings, or mixed scrap containing lead or cadmium-based coatings, the regulatory picture changes materially.

The Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016

Aluminium dross and salt cake are explicitly listed under Schedule II of the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016 (notified by MoEFCC). Any facility generating more than 10 kg of dross per day is required to obtain authorisation from the relevant State Pollution Control Board (SPCB) under Rule 5(1). Storage cannot exceed 90 days without SPCB approval. Transport must accompany a Form 10 manifest, and the material can only be consigned to an authorised recycler or treatment facility. Violations attract penalties under the Environment (Protection) Act, 1986, including criminal liability for directors under Section 16.

The Environment (Protection) Act, 1986 — Emission Standards for Secondary Smelters

Secondary aluminium smelters are regulated under the Environment (Protection) Act, 1986 and its subordinate emission standards notified by the Central Pollution Control Board (CPCB). The CPCB’s General Standards for Discharge of Environmental Pollutants cap particulate matter emissions from reverberatory furnaces and set chlorine/HCl limits for facilities using chlorine fluxing agents. In late 2024, CPCB issued revised stack emission norms for secondary non-ferrous smelters as part of a broader tightening of industrial cluster standards — facilities in Rajkot and Bhiwadi were among those directed to upgrade air pollution control equipment within 12 months.

GST HSN Classification and Compliance

Under the Goods and Services Tax framework, aluminium scrap is classified under HSN 7602 and attracts a GST rate of 18%. Industrial sellers must ensure their buyer issues a valid tax invoice under the GST Act, 2017. Transactions without proper GST invoicing — still common in informal scrap trade — expose sellers to input tax credit denial and potential scrutiny under GSTR-3B reconciliation. The GST portal’s HSN master provides the detailed classification for mixed scrap lots.

For exporters or importers of aluminium scrap, the Foreign Trade Policy 2023 (administered by DGFT) governs permissible categories. Certain grades of aluminium scrap are freely importable; others require a prior licence. The 2.5% customs duty introduced in Budget 2024-25 applies to imports under HS 7602, and DGFT circulars issued in 2024 clarified that re-export of imported scrap in processed form requires separate approval.

Environmental Impact: The Numbers That Make the Business Case

The environmental case for aluminium scrap recycling in India does not rest on sentiment — it rests on energy economics and carbon accounting that CFOs and sustainability heads can actually use in their BRSR disclosures.

Producing one tonne of primary aluminium requires approximately 14,000–16,000 kWh of electricity — almost entirely from electrolytic reduction of alumina. Producing the same tonne from scrap requires roughly 700 kWh. At India’s average industrial electricity tariff of ₹7–₹9/kWh, that is a saving of ₹90,000–₹1,35,000 per tonne of output for the secondary smelter — savings that are partly passed back to scrap sellers in the form of competitive scrap prices.

From a carbon perspective, primary aluminium production generates approximately 11–18 tonnes of CO₂-equivalent per tonne of metal (including upstream bauxite mining and refining). Secondary aluminium generates roughly 0.5–1 tonne of CO₂-equivalent per tonne. For a manufacturing facility reporting under SEBI’s BRSR Core framework (mandatory for the top 150 listed companies from FY 2023-24, extended to the top 250 from FY 2024-25), documenting aluminium scrap recycling as part of Scope 3 emissions reduction is a tangible, auditable action. A certificate of recycling from a verified recycler is the documentation auditors look for.

India generated an estimated 800,000 tonnes of aluminium scrap in FY 2024-25 from post-industrial and post-consumer sources combined. Of that, informal sector recovery — unregulated, untaxed, and often environmentally damaging — accounted for a significant share. Every tonne that moves through a formal, CPCB-authorised channel is a tonne that is properly accounted for in India’s material flow data and does not end up being open-melted in unregulated backyard operations.

Market Demand: Who Is Buying Aluminium Scrap in India and Why

Secondary aluminium demand in India is structurally driven by three sectors: automotive, construction, and packaging. The automotive sector’s appetite alone is substantial — the average passenger car produced in India contains 60–80 kg of aluminium (up from under 40 kg a decade ago), and OEMs are actively pushing for recycled-content aluminium in their supply chains to meet global Scope 3 targets set by parent companies in Europe and Japan.

The construction sector is the largest consumer of aluminium extrusions — windows, curtain walls, structural profiles — and fabricators in Maharashtra, Gujarat, and Telangana run their own in-house scrap recovery programmes, though offcuts still leak to the unorganised market. The beverage packaging sector, growing at roughly 8–10% annually on the back of premium ready-to-drink and craft beverage expansion, is creating a fast-growing stream of used beverage can (UBC) scrap.

Secondary smelter clusters in Rajkot (Gujarat) and Bhiwadi (Rajasthan) together account for an estimated 60% of India’s secondary aluminium ingot production. These clusters actively compete for scrap supply with traders and brokers operating on thin margins. Sellers who engage directly with authorised buyers — bypassing two or three trading intermediaries — routinely recover ₹5–₹15/kg more on clean grades. Our comprehensive scrap buying service is designed to give industrial sellers direct-buyer pricing without the intermediary discount.

The 7-Step Compliance Checklist for Industrial Aluminium Scrap Sellers

Whether you are a plant manager clearing quarterly scrap or a sustainability head building a documented recycling programme for BRSR disclosure, these are the actions that need to be on your checklist before the quarter closes.

1. Classify your aluminium scrap correctly. Segregate clean alloy scrap (non-hazardous) from dross, salt cake, and oil-contaminated turnings (potentially hazardous under Schedule II of the Hazardous and Other Wastes Rules, 2016). Do not mix hazardous and non-hazardous streams in the same storage area.
2. Check your SPCB consent conditions. If your facility generates dross as a regular by-product, confirm that your Consent to Operate (CTO) issued by your State Pollution Control Board covers hazardous waste generation. Generating listed hazardous waste without authorisation under Rule 5(1) of the Hazardous and Other Wastes Rules, 2016 is a compliance breach with criminal exposure.
3. Verify your buyer’s authorisation. Only transfer dross or contaminated scrap to a facility holding a valid CPCB or SPCB authorisation for hazardous waste recycling or treatment. Ask for the authorisation certificate number and expiry date — it is your defence in an audit. The CPCB’s hazardous waste portal lists authorised facilities by state.
4. Insist on a GST-compliant tax invoice. Aluminium scrap under HSN 7602 attracts 18% GST. A valid tax invoice is essential for input tax credit claims. Informal cash transactions deny you the credit and create audit risk under GSTR-3B reconciliation.
5. Obtain a certificate of recycling for every lot. This is the document your BRSR Core reporting requires to substantiate Scope 3 emission reductions. Ensure the certificate includes the recycler’s name, GSTIN, material quantity, and a statement of the recycling process used.
6. Maintain records for a minimum of 5 years. Under the Hazardous and Other Wastes Rules, 2016, records of hazardous waste generation, storage, and disposal must be maintained for at least 5 years and submitted annually to your SPCB in Form 4. For non-hazardous aluminium scrap, retain records for at least 3 years to cover GST audit windows.
7. Update your BRSR disclosure. If your organisation is among the top 1,000 listed companies by market capitalisation, your BRSR filing — now mandatory under SEBI’s LODR Regulations — must account for material recycling. Quantify the tonnage recycled, the recycler’s name and authorisation status, and the estimated Scope 3 CO₂ saving in your annual report.

How to Sell Aluminium Scrap: Practical Steps for Factory Owners

The process of selling aluminium scrap need not be complicated, but the steps taken before the buyer arrives at your gate determine the price you receive and the compliance exposure you carry.

Begin with an internal scrap audit: quantify material by grade, estimate monthly generation volumes, and identify whether any stream contains hazardous characteristics (dross, oil-soaked turnings, coatings with heavy metal pigments). For factories in Maharashtra, MPCB’s online portal now allows digital submission of hazardous waste manifests — a system that was paper-only until 2023. Facilities that have not migrated to digital manifesting should do so immediately; MPCB inspections in the Mumbai Metropolitan Region increasingly flag paper-manifest non-compliance as a priority finding.

Once graded and segregated, obtain indicative quotes from at least two to three authorised buyers. Prices are negotiated on a delivered or ex-works basis — understand which applies and factor in logistics costs accordingly. Ensure the final transaction is documented with a purchase order, a weigh-bridge slip, and a GST tax invoice. Our detailed guide on how to sell industrial scrap step-by-step covers the full documentation flow for factory owners across sectors.

For ongoing scrap generation — rather than one-time clearances — a formal scrap buyback arrangement with a registered recycler gives you predictable pricing, scheduled pickups, and a paper trail that closes seamlessly at year-end for both tax and BRSR purposes. Government auctions through MSTC Ltd are another route for public-sector undertakings required to follow competitive bidding norms.

Related Articles

• Scrap Metal Rates in India: A Complete 2026 Guide for Businesses
• How to Sell Industrial Scrap: A Step-by-Step Guide for Factory Owners
• EPR Registration for Plastic Waste: A Complete Guide for Manufacturers

Frequently Asked Questions

What is the current aluminium scrap price in India?

Aluminium scrap prices in India ranged from ₹105 to ₹155/kg in Q1 2026, depending on grade. Clean extrusion scrap (6xxx series, uncoated) commands the highest rates at ₹140–₹155/kg, while painted sheet and oil-contaminated turnings trade at ₹100–₹120/kg. Prices are revised weekly by buyers, benchmarked to LME aluminium cash settlements. Always request a written quote tied to the LME date to avoid price disputes at the time of delivery.

Is aluminium dross classified as hazardous waste in India?

Yes. Aluminium dross and salt cake are listed under Schedule II of the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016. Generators producing more than 10 kg/day require SPCB authorisation under Rule 5(1). Storage must not exceed 90 days, transport requires a Form 10 manifest, and the material can only be consigned to a facility holding a valid hazardous waste recycling/treatment authorisation from CPCB or the relevant SPCB. Non-compliance attracts liability under the Environment (Protection) Act, 1986.

What GST rate applies to aluminium scrap, and what HSN code should I use?

Aluminium scrap is classified under HSN 7602 and attracts an 18% GST rate. Both the buyer and seller must ensure the transaction is covered by a proper GST tax invoice. Sellers who accept payment without a valid invoice forfeit their input tax credit claim and may face scrutiny during GSTR-3B reconciliation audits. The GST portal’s HSN search tool can confirm sub-classifications for mixed or alloy-specific lots.

Which certificate do I need from my recycler for BRSR reporting?

SEBI’s BRSR Core framework (mandatory for the top 250 listed companies from FY 2024-25) requires companies to report material recycled and Scope 3 emissions avoided. A certificate of recycling from your aluminium scrap recycler — stating the recycler’s name, GSTIN, authorisation number, quantity processed, and recycling method — is the standard supporting document. Auditors and third-party assurance providers increasingly treat the absence of this certificate as a reportable gap in BRSR assurance engagements.

Can I sell aluminium scrap without going through an authorised recycler?

For clean, non-hazardous grades (uncoated extrusion scrap, clean cast scrap), there is no regulatory bar on selling to any registered GST dealer. However, for dross, oil-contaminated turnings, or scrap containing hazardous coatings, the Hazardous and Other Wastes Rules, 2016 require the buyer to hold a valid SPCB/CPCB recycling authorisation. Transferring hazardous waste to an unauthorised buyer is a breach of Rule 9, and liability attaches to the generator, not just the recipient. Verify authorisation certificates before any transaction involving listed hazardous wastes.

Work With The National Recycling Corporation

The National Recycling Corporation is a Mumbai-headquartered B2B recycling and scrap trading company with pan-India operations covering Maharashtra, Gujarat, Delhi-NCR, Karnataka, Telangana, and Tamil Nadu. We handle aluminium scrap across all grades — from clean extrusion offcuts to dross — with a fully documented, GST-compliant transaction process that meets the needs of both your accounts department and your sustainability team.

Every aluminium scrap transaction through our platform includes a GST-compliant purchase invoice (HSN 7602), a certificate of recycling suitable for BRSR Scope 3 disclosure, and, where applicable, Form 10 manifest management for hazardous dross and contaminated turnings. Our pricing is benchmarked to live LME rates, published weekly, and applied transparently — no hidden deductions for yield loss unless agreed upfront and documented. We work with CPCB-authorised disposal and recycling partners across our operational network for hazardous waste streams.

If your facility generates aluminium scrap regularly — whether as a standalone stream or alongside other non-ferrous metals — we offer structured buyback programmes with scheduled pickups, advance price locking arrangements, and annual summary reports for your BRSR filing. Explore our non-ferrous metals recycling service for full details, or visit our about page to understand our credentials and operational footprint.

• Pan-India doorstep pickup — no minimum lot size for industrial accounts in metro cities
• GST-compliant tax invoicing under HSN 7602 on every transaction
• Certificate of recycling issued within 5 working days of material processing
• LME-benchmarked pricing, revised weekly and shared via email/WhatsApp
• Form 10 manifest management for hazardous aluminium dross and contaminated streams
• BRSR-grade documentation package for top-250 listed company clients
• Dedicated account manager for facilities generating over 500 kg/month

Contact us to schedule a site visit, request a grade-wise valuation, or set up a recurring buyback programme. Our team typically responds within one business day.

Sources and References

• Central Pollution Control Board — Hazardous Waste Management, Authorised Facilities List
• Ministry of Environment, Forest and Climate Change — Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016
• Ministry of Steel, Government of India — Non-Ferrous Metals Policy & Scrap Import Data
• NITI Aayog — Circular Economy Action Agenda for Non-Ferrous Metals
• Bureau of Indian Standards — IS 617 and IS 21000 Secondary Aluminium Ingot Specifications
• GST Portal — HSN 7602: Aluminium Waste and Scrap Classification
• London Metal Exchange — Aluminium Cash Settlement Prices
• MSTC Ltd — Government Scrap Auctions Portal