Recycled metals are a cornerstone of the circular economy and critical to meeting the increasing demand for raw materials sustainably. With global pressures to reduce carbon emissions, conserve resources, and secure supply chains, recycling metals like aluminum, copper, lithium, cobalt, and rare earths is gaining significant momentum. Investors seeking exposure to green industrial trends should consider companies and sectors focused on recycled metals in 2025.
Why recycled metals matter
- Environmental impact: Recycling metals consumes less energy and emits fewer greenhouse gases compared to primary mining.
- Supply security: Recycled metals reduce reliance on geopolitically sensitive regions and volatile mining outputs.
- Economic growth: Increasing scrap generation and improved recycling technologies expand the market.
- Policy support: Governments worldwide incentivize recycling through regulations and subsidies.
Key recycled metals and related investment areas
Aluminum recycling
- Advantages: Requires up to 95% less energy than primary production
- Leading companies:
- Novelis Inc. (subsidiary of Hindalco, NSE: HINDALCO) – World’s largest aluminum recycler, focusing on automotive and packaging sectors
- Constellium SE (NYSE: CSTM) – Specializes in recycled aluminum for aerospace and transportation
- Real Alloy (private) – Major processor of recycled aluminum alloys, growing via partnerships
Copper recycling
- Significance: Essential for electrical wiring, electronics, and EV infrastructure
- Companies:
- Aurubis AG (ETR: NDA) – Leading copper recycler in Europe with integrated smelting and refining
- Sims Metal Management (ASX: SGS) – One of the largest global metal recyclers, including copper scrap
- Nyrstar (private) – Processes recycled copper and zinc concentrates
Battery metals recycling (lithium, cobalt, nickel)
- Drivers: Electric vehicle boom increases spent battery volumes needing recycling
- Key players:
- Li-Cycle Holdings Corp. (NYSE: LICY) – Canadian lithium-ion battery recycler using hydrometallurgical processes
- American Battery Technology Company (NASDAQ: ABAT) – U.S.-focused recycler with battery metals extraction and processing
- Redwood Materials (private) – Founded by Tesla’s ex-CTO, focused on lithium-ion battery recycling and material recovery
Rare earth elements (REE) recycling
- Challenge: Complex separation but critical for magnets and electronics
- Companies:
- UMICORE (EBR: UMI) – European leader in rare earth recycling and refining
- Medallion Resources (TSX-V: MDL / OTCQX: MLLOF) – Developing technologies for REE extraction from recycled materials
Investment vehicles and ETFs
- Global X Circular Economy ETF (KRBN) – Focus on circular economy leaders including recycled metals producers
- VanEck Rare Earth/Strategic Metals ETF (REMX) – Exposure to companies involved in REE mining and recycling
- Amplify Lithium & Battery Technology ETF (BATT) – Includes battery metals recyclers alongside miners and manufacturers
Trends shaping recycled metals investment in 2025
- Technological advances: Improved hydrometallurgical and direct recycling methods increase recovery rates and economics
- Regulatory environment: Extended producer responsibility (EPR) laws and recycling mandates expand scrap supply
- Supply chain integration: Battery and electronics makers partner with recyclers for closed-loop sourcing
- ESG and investor focus: Growing demand for sustainable supply chain transparency fuels capital flows
Risks and challenges
- Capital intensity: Recycling facilities require significant upfront investment and scale to be profitable
- Technological hurdles: Some metals (e.g., rare earths) remain challenging and costly to recycle efficiently
- Commodity price volatility: Scrap and refined metal prices can fluctuate with global markets
- Regulatory uncertainty: Recycling policies differ widely by region, impacting operations and profitability
Recycled metals present compelling investment opportunities aligned with sustainability, resource security, and industrial innovation. Investors who identify companies with scalable technologies, strategic partnerships, and strong ESG credentials can capitalize on the growth of this essential sector in 2025 and beyond.