ABSTRACT
Recycling in aluminum markets is often advocated on economic grounds. Aluminum recycling saves substantial amounts of energy and in general eliminates the environmental damage associated with aluminum mining and increased energy use. Yet despite the seemingly obvious social advantages of recycling, primary ore prices have fallen in the past 10 to 15 years in inflation-adjusted terms and recycling rates for scrap material such as aluminum beverage cans have fallen to under 50%. Some analysts say that aluminum prices are too low because the markets for primary and recycled aluminum are flawed and the prices do not accurately reflect the full social costs of aluminum mining. Others say market failures in aluminum markets are relatively minor and aluminum prices are low because aluminum ore is abundant and the technology to extract it is quite powerful.
