Tariffs, Trade and Turbulence: A Guide for Aluminium Scrap Dealers

The aluminium market is entering a period of rapid change, driven by shifting trade policies, price fluctuations and growing pressure on sustainable materials. For traders dealing in scrap and secondary aluminium, staying ahead of these changes is essential.

Recent US tariffs have reshaped the global playing field, but not always in expected ways. While aluminium scrap has been spared the brunt of these new duties, traders still face a mix of risk and opportunity.

But what does this mean for your business?

Tariff-free scrap? Yes. 
Trouble-free trading? Not quite.

As of June 4, 2025, the US has doubled tariffs on aluminium and its derivatives, now set at 50% for imports from all countries. The only exception is the United Kingdom, which continues under a 25% tariff as part of the U.S.–UK Economic Prosperity Deal, though this lower rate is only guaranteed until July 9, 2025.

But here’s the catch: aluminium scrap is still exempt from these new tariffs.

This sounds like good news for recyclers and traders. And in some ways, it is. Scrap can still flow into the US tariff-free. However, the ripple effects of the policy go much deeper.

Higher US Prices Are Reshaping Global Scrap Flows

The tariffs have pushed up primary aluminium prices in the US, especially the Midwest Premium, which now reflects the added import costs. This is pulling more scrap aluminium into the US, as traders chase better returns.

For European exporters, particularly in Germany, the price gap between EU and US scrap has widened by $300 to 400 per tonne, a serious incentive to reroute shipments across the Atlantic.

What’s the implication for aluminium scrap traders?

1. More competition for domestic scrap supply.
2. Rising prices in local markets, especially in Europe.
3. Export-driven shortages in some regions, squeezing recyclers and secondary producers.

Europe’s Circular Economy Under Pressure

As more scrap heads for the US, Europe’s recycling loop is being weakened. The region’s aluminium sector, especially in Germany, depends on steady scrap flows to support its low-carbon, closed-loop production goals.

If scrap outflows continue at this pace:

• Recycling capacity may go underutilised.
• Primary aluminium use could increase, against the region’s climate goals.
• Strategic autonomy in raw materials will suffer.

This situation is especially risky for secondary manufacturers in Europe, who may now face:

• Tighter supply and rising costs for input materials.
• Greater dependency on imported or primary aluminium.
• Volatility in pricing and availability from month to month.

The Silver Lining: Domestic Demand for Recycled Aluminium is Growing

There is some upside, particularly for US-based recyclers and traders.

With imported primary metal more expensive, many US manufacturers are turning to recycled content to cut costs. This creates a window of opportunity for scrap processors and secondary producers.

If you're operating in or exporting to the US, here’s what you should note:

• Aluminium scrap is in demand.
• Prices are improving.
• Tariff-free access gives you a competitive edge, at least for now.

But this trend could reverse quickly if trade partners retaliate or if the US changes policy direction again.

Risks That Can’t Be Ignored

While the scrap exemption is holding firm, broader risks remain:

1. Operational costs are rising. Many recyclers rely on imported machinery, spare parts or semi-finished metals, all now subject to tariffs.
2. Retaliatory measures are possible. Countries hit by US tariffs could respond with restrictions on US scrap imports or on exports of needed inputs.
3. Manufacturing slowdown could reduce scrap supply. If high metal prices stall production in construction or automotive, less scrap will be generated domestically.
4. Processing capacity matters. Not all facilities can easily scale to meet demand. Without investment, traders may find that local recyclers can’t absorb all the material they’re sourcing.

What Traders Should Do Now

The global aluminium market is shifting fast. For scrap traders and secondary manufacturers, that means reassessing strategy and tightening operations.

Here’s where your focus should be:

1. Watch Price Differentials Closely

Arbitrage is driving scrap flows today. Stay alert to regional price gaps, especially between the US, Europe and Asia. Export when margins justify it, but don’t lose sight of domestic customers who may be squeezed by shortages.

2. Diversify Your Markets

The risk of retaliation or further tariffs is real. Look beyond traditional trading partners and build relationships in newer, tariff-neutral markets.

You can create a free company page and reach new markets with rising demand.

3. Strengthen Supplier Contracts

Scrap is getting harder to source in high-demand regions like China, India, Germany and so on. Secure your supply chain with better terms, long-term contracts or incentives for consistent delivery.

4. Align with Recyclers Who Can Scale

If you’re trading bulk volumes, make sure your downstream partners can handle it. Those with recent investments in processing capacity, especially in the US, are your best bets.

5. Stay Ahead of Policy Shifts

These changes are politically driven. Be ready to respond quickly to new rules, exemptions or trade measures. AL Circle’s report on World Recycled ALuminium Market Analysis: Industry forecast to 2032 is a must-have for manufacturers, investors, policymakers and analysts looking to stay ahead of the curve.

Final Word

The aluminium recycling space is no longer business as usual. US tariffs are tilting trade flows, raising prices and shaking up old supply routes. While scrap has escaped the full impact, so far, the surrounding market is anything but stable.

For traders, this is the time to actively manage your exposure, build resilience into your trading model and capitalise on regional demand shifts.