Non-ferrous metals are among the most intensively recycled materials in modern economic life. This situation is not the result of recent political encouragement or life style changes. It is the result of centuries of economic development. Several common features of non-ferrous metals have stimulated this development.

Non-ferrous metals are commonly found in the earth but are difficult to find in concentrated form (a deposit), and difficult to extract and refine. This means that non-ferrous metals produced from primary sources sell for relatively high prices.

During both first use (that is, during fabrication) and end use (that is, in the life of the finished product), non-ferrous metals retain their basic properties and thus retain their utility value to a much larger extent than is the case with most industrial materials. At each stage of the production and use process, the non-ferrous metal may be returned to the supply chain without significant loss of its intrinsic properties.

In other words, the metal keeps its value; it does not degrade; if contaminated, it can be restored to its original quality if that is desired.

Many first users of non-ferrous metals have developed production technology which allows them to use recycled metals very efficiently with the result that primary and recycled units may be used almost interchangeably. This means that the commercial value given to recycled metal inputs is much closer to the price of the primary product than is typically the case with industrial raw materials.

For example: the nickel units contained in collected stainless steel scrap is usually valued at between 90 and 92% of the current primary nickel value.

As the prices of primary metals are high and recycled units are readily substituted for primary units, it follows that prices obtainable for good quality recycled metal are also high -- high enough to motivate collectors, sorters, shippers and processors to operate the recycling chain effectively.

Even at the low points of metal price cycles, it is usual for secondary metal to continue to be collected and processed intensively even if the volumes made offered for sale for melting into new metal may decline. This is because material is held ("hoarded") in anticipation of future higher prices. In this way secondary metal moderates the nickel price cycle: becoming scarcer during periods of low prices, increasing in availability during periods of high prices.

Notwithstanding the effect of high metal prices in stimulating end-of-life collection, actual collection rates for end-of-life metal products will reflect the detailed pattern of use of these products. Thus lead acid automobile batteries are able to be collected efficiently and are very intensively recycled whereas aluminum cooking foil is widely dispersed in municipal waste streams and is often not collected. This is the case despite the fact that primary aluminum prices are much higher than lead prices.

Much primary metal production is from low grade ores containing only a small percentage of the metal. Many of the processes developed to produce primary metal from these low grade ores (e.g., smelters, dissolution processes) are also capable of using recycled material with a low average percentage of the metal. Lower grade recycled material will, of course, command a lower price in the market than higher grade material.

So a pattern emerges:

• high grade recycled material tends to be bought and used by first-use industry as a substitute for primary metal, paying only slightly less for the material (per tonne of metal contained) compared to the current price of primary metal: and
• low grade secondary material tends to be bought and used as feed by primary metal producers, paying a much lower price (per tonne of metal contained) than is obtainable for high grade material.

Non-ferrous metals are generally used in long life applications -- with metal products not re-entering the recycling chain until several decades after their initial manufacture. If overall production levels of these products ("demand") has been growing significantly on a long term basis (as is the case for most non-ferrous metals), then the volume of end-of-life products coming back on the market will be much lower than the current volume of production. Consequently, in a period of steadily increasing demand growth, there will be an inherent shortage of recycled metal supplies.

Even if 100% of the material coming available were recaptured through recycling, additional primary metal is needed to meet needs.

Non-ferrous metals can in theory be recycled infinitely without serious loss of product quality. However, the economic cost of using a particular metal in the recycled form will vary considerably from one industry to another, or from one geographic region to another. Because of this, the use of that metal in recycled form can be much more intensive in some industry sectors and much less in others in different parts of the world.