US President Donald Trump’s decision to double tariffs on aluminum imports to 50% has triggered a growing scrap supply crisis, as US buyers turn aggressively to international markets — particularly Europe — to source tariff-free aluminum scrap.
While the tariffs hit most aluminum products, scrap remains exempt, creating a lucrative gap that US fabricators are racing to exploit. Imports of recyclable material have already jumped, with March volumes exceeding 80,000 tons — the highest since 2022.
Soaring premiums and shifting trade flows
The US Midwest aluminum premium has surged to a record $1,325 per ton, far above the base price of $2,430 on the London Metal Exchange. This premium reflects not transportation costs, but tariff pressures and supply tightness.
Fabricators that turn raw aluminum into semi-finished goods — like can sheets — are once again benefiting, able to pass on tariff-related costs even when sourcing scrap domestically or internationally.
EU fears scrap leakage
European aluminum producers are alarmed by the spike in exports to the US. The European Aluminium Association warned of a “full-blown scrap crisis” and urged the European Commission to act quickly with reciprocal export duties.
The EU had already outlined a trade defense plan in March aimed at curbing the outflow of critical raw materials. Now, under mounting pressure, Brussels may need to accelerate its timeline for protective measures.
China feels the squeeze
China, the world’s top aluminum scrap importer, is caught in the crossfire. It has liberalized scrap import rules to boost domestic recycling, but now faces increased competition from the US for scrap sourced from Asia and Europe.
With China’s primary aluminum production capped, recycling is essential to meet demand. But with Europe clamping down and the US driving up prices, Chinese buyers are being squeezed from both sides.
What comes next
The global aluminum scrap market, once fluid and flexible, is being reshaped by protectionist policies and price distortions. The once-humble scrap pile is now a battleground in the broader struggle over trade, climate, and industrial power.
