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| McKinsey |
Report sees tight markets for copper, steel, and plastics; calls for new secondary sourcing and processing innovation
McKinsey Forecasts Shortfall in Circular Metal Supply by 2035
Demand for low-carbon, recycled-content metals will significantly outstrip new supply over the next decade, according to a new report by McKinsey & Company. The study forecasts persistent shortfalls in scrap-based inputs—particularly for copper, flat-rolled steel, and recycled plastics—driven by increasing pressure to decarbonize industrial production and meet sustainability targets.
Circular Demand Rising, but Supply Pools Remain Structurally Constrained
The report, “Looking upstream: A path to unlocking low-carbon, circular materials,” projects a 3 million metric ton annual deficit in recycled-content copper between 2025 and 2035. Similar “structural” imbalances are expected in flat-rolled steel and plastics. Only the aluminum sector is expected to come close to meeting recycled-content demand by 2035, owing to its mature secondary market and better-established recovery streams.
However, McKinsey warns that green premiums—extra costs for low-carbon materials—may slow the development of broader circular markets. As the report notes, “The slow maturation of a premium market could be a bottleneck for broader development,” especially in sectors already facing cost pressure.
Recyclers Urged to Tap New Scrap Streams and Build Infrastructure
To meet rising circular material demand, the report encourages recyclers, manufacturers, and policymakers to unlock untapped secondary pools, especially post-consumer scrap from end-of-life products. This includes expanding recovery from waste electrical and electronic equipment (WEEE), and overcoming technical barriers that have long hindered the upcycling of mixed-alloy scrap.
McKinsey highlights a range of challenges across the recycling chain—collection, dismantling, sorting, and processing—and emphasizes the importance of technological advancement, economies of scale, and low-cost logistics to make new secondary sourcing economically viable.
The authors recommend partnerships and dedicated infrastructure development to ensure consistent feedstock access, particularly in hard-to-recycle sectors. They also suggest prioritizing avoiding downcycling and preserving alloy purity to meet strict customer specifications for circular materials.
ScrapInsight Editorial Commentary
McKinsey’s forecast underscores a looming reality: the transition to a low-carbon economy hinges on solving the circularity bottleneck. The projected supply deficits—especially in copper and flat steel—pose major risks to clean energy and infrastructure targets. For recyclers, this is both a challenge and a growth opportunity. Strategic investment in WEEE recovery, AI sorting, alloy tracing, and logistics networks will be essential. Those who can control high-quality secondary flows will shape the competitive edge in the metals sector of 2030 and beyond.
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