Aluminum Scrap Metal Market Report: September 2025

US aluminum scrap prices in September 2025 maintained relative stability with modest upward pressure across most categories. Extrusion aluminum commanded prices between $0.70-0.80 per pound, while aluminum cans traded in the $0.45-0.48 per pound range depending on volume and contamination levels. Cast aluminum held steady at approximately $0.50 per pound, with aluminum radiators fetching $0.50 per pound for clean material.

Regional variations reflected the impact of tariff policies and local supply conditions. The primary aluminum P1020 grade remained elevated due to a dramatic 74% decline in imports since June, following the doubling of aluminum import tariffs from 25% to 50%. This import reduction created artificial scarcity that supported higher domestic pricing across all aluminum categories.

The Midwest premium, a key indicator of regional aluminum pricing dynamics, held between $0.70-0.72 per pound throughout September. This stability masked underlying tensions in the market, as domestic mills struggled with oversupply of imported recycled material while simultaneously facing higher costs for primary aluminum inputs. Secondary aluminum smelters reported operating rates remaining robust, processing approximately 210,000 metric tons in September, up 1.4% from the previous year.

The automotive sector continued to drive substantial aluminum demand throughout September, with vehicle manufacturers increasingly adopting aluminum components to meet fuel efficiency standards. US automotive aluminum demand is projected to reach 556 pounds per vehicle by 2030, representing a massive increase from just 120 pounds in 1980. This transition alone accounts for nearly 3 million metric tons of additional aluminum consumption, representing approximately 30% of total US aluminum product demand.

Electric vehicle production provided another significant demand catalyst. Each EV requires substantially more aluminum than traditional vehicles, particularly for battery enclosures and lightweight structural components. The push toward electrification created sustained demand for high-grade aluminum alloys, supporting premium pricing for clean scrap materials that meet stringent automotive specifications.

The packaging industry, particularly beverage can production, maintained steady consumption despite concerning trends in recycling rates. US beverage can shipments reached 3.088 billion pounds in 2023, consuming nearly 1.4 million metric tons of aluminum annually. However, this sector faced headwinds from declining recycling rates, which hit 43% in 2023, the lowest level in decades and well below the historical average of 52%.

Construction and infrastructure projects provided baseline demand support. Power grid modernization initiatives required substantial aluminum for transmission lines and electrical infrastructure. The sector benefits from aluminum's conductivity properties, with 100% of US high voltage transmission systems incorporating aluminum components. Solar panel installations also consumed significant aluminum for framing systems, with nearly 100% of panels sold in the US utilizing aluminum extrusions.

The most dramatic supply-side development was the massive influx of imported aluminum scrap following the implementation of higher tariffs on finished products. US imports of aluminum scrap reached 227,000 tons between March and May 2025, representing a 40% increase compared to the same period in 2024. This surge occurred because aluminum scrap remained exempt from the 50% tariff imposed on finished aluminum products.

This tariff structure created perverse incentives in global aluminum trade. European aluminum scrap exports to the US accelerated dramatically, with EU suppliers redirecting material traditionally processed domestically. The European Aluminum Association reported concerns about "scrap leakage" as critical recycling feedstock left European markets for higher-priced US destinations.

Domestic primary aluminum production continued its long-term decline. The US operated just six primary aluminum smelters in 2025, with four operating at reduced capacity or temporarily curtailed. Century Aluminum's Mt. Holly facility in South Carolina exemplified these challenges, running at approximately 75% of its 230,000 ton annual capacity since 2015 due to high electricity costs and environmental regulations.

Secondary aluminum production faced mixed conditions. Old scrap consumption increased dramatically by 151.2% in September compared to the previous year, reaching 304,000 tons. However, this surge reflected one-time inventory adjustments rather than sustainable demand growth. New scrap processing increased more modestly by 8.4%, indicating healthier underlying market fundamentals.

Federal Reserve policy expectations dominated macroeconomic considerations in September. Markets priced in a 93% probability of a 25 basis point rate cut at the September 17 meeting, with additional cuts anticipated through year-end. Lower interest rates typically support commodity demand by reducing financing costs for manufacturers and stimulating economic activity.

The tariff regime created complex economic distortions throughout the aluminum supply chain. The 50% tariff on finished aluminum products while exempting scrap created arbitrage opportunities that distorted normal market relationships. Domestic mills reported difficulties managing inventory as cheap imported scrap competed with higher-priced domestic material, while finished product prices remained elevated due to tariff protection.

Dollar weakness provided modest support for aluminum pricing, though this effect was overshadowed by trade policy impacts. The Dollar Index declined 7% year-to-date, making US aluminum more competitive internationally and reducing input costs for domestic processors using imported materials.

Trade relationships remained strained, particularly with Europe and Canada. The EU threatened retaliatory measures targeting aluminum scrap exports to the US, potentially disrupting the surge in imported recyclable material. Canada implemented its own protective measures, including tariff-rate quotas on steel mill products that could extend to aluminum markets.

The short-term outlook for US aluminum scrap markets remains cautiously optimistic through the fourth quarter of 2025, though significant uncertainties persist around trade policy and recycling infrastructure. Industry forecasts suggest aluminum scrap prices will remain supported by the current tariff structure, though the sustainability of artificially elevated pricing depends on policy continuity.

The Federal Reserve's anticipated rate cuts could provide additional market support by stimulating construction and automotive demand. Historical precedent suggests aluminum markets respond favorably to monetary easing, particularly when combined with infrastructure spending initiatives. Lower borrowing costs should support both residential and commercial construction, two key aluminum-consuming sectors.

Seasonal factors typically support aluminum demand in the fourth quarter as beverage can production peaks ahead of holiday seasons and automotive manufacturers increase production for model year transitions. However, the traditional seasonal patterns may be disrupted by the unusual trade dynamics created by current tariff policies.

The recycling crisis presents both challenges and opportunities for scrap dealers. The 43% recycling rate for beverage cans represents substantial lost value, with over 61 billion cans landfilled in 2023 worth approximately $1.28 billion in material value. Efforts to improve collection infrastructure could gradually increase domestic scrap availability, though such improvements require significant capital investment and policy support.

Automotive demand growth provides the most reliable long-term support for aluminum scrap markets. The transition to electric vehicles and continued lightweighting of traditional vehicles creates sustained consumption growth that should support pricing regardless of cyclical economic factors. The aerospace sector, while smaller in volume, offers premium pricing for high-grade scrap materials meeting stringent specifications.

For US scrappers and recycling yard owners, current conditions favor strategic positioning around automotive and industrial grades while monitoring trade policy developments closely. The influx of imported scrap creates near-term competitive pressure, but longer-term demand fundamentals remain favorable. Industrial businesses should consider forward contracting for specialized aluminum grades, as supply disruptions from trade policy changes could create periodic shortages despite overall market abundance.

The key variables to monitor include Federal Reserve policy implementation, potential changes to the tariff regime, and progress on recycling infrastructure improvements. Success in this environment requires flexibility to adapt to rapid policy changes while maintaining focus on fundamental demand drivers from electrification and infrastructure modernization.