US aluminum scrap trade faces 2025 shake-up amid tariffs and global demand

In the first half of the year, tariffs and slowing domestic demand collided with a boom in global recycling, leaving the US aluminum scrap trade looking very different from a year ago.

Imports rise despite tariff pressures

Between January and June 2025, the US imported about 430,000 tonnes of aluminum scrap - a jump of 31 per cent from 328,000 tonnes during the same period last year. But this growth didn't come easy. It unfolded in a tense policy climate where new import tariffs were reshaping how recyclers sourced their raw material.

Early in the year, scrap inflows picked up sharply. January saw 63,400 tonnes, up 21 per cent year-on-year. February surged to 81,500 tonnes, marking a dramatic 60.4 per cent rise, and March matched that level, up 53.8 per cent from 2024. Imports stayed strong in April, rising 27 per cent to 71,100 tonnes, before flattening in June at 77,200 tonnes - the same as a year earlier.

The first quarter looked strong, but momentum faded once the 25 per cent aluminum import tariff took effect on March 12, 2025. With costs rising, recyclers turned increasingly toward domestic recovery instead of bringing in foreign scrap.

Exports stay steady and strong

While imports came under strain, US aluminum scrap exports held their ground. In the first half of 2025, the country shipped out 1.03 million tonnes, just 1 per cent below the 1.04 million tonnes exported in the same period of 2024.

Month by month, the pattern showed modest swings rather than clear growth. January exports slipped 1.3 per cent to 153,000 tonnes, but February rose 2.5 per cent to 162,000 tonnes. March declined 6 per cent, April eased 1.7 per cent, and June steadied at 173,000 tonnes, nearly identical to the year before.

Even so, exports continued to outpace imports by a wide margin. On average, the US shipped 171,000 tonnes of aluminum scrap each month, compared with just 71,000 tonnes imported. In total, the country exported 2.4 times more scrap than it brought in - a clear sign of its strength as a global supplier of secondary aluminium.

Domestic recovery gains momentum

Behind these trade numbers lies a notable domestic shift. Aluminum scrap recovery inside the US accelerated through early 2025. In February, total recovery reached 321,000 tonnes, up 8 per cent from January's 297,000 tonnes. Roughly half of that was exported, while the rest was stockpiled ahead of the new tariff's introduction.

By June, the Department of Energy reported 305,000 tonnes of scrap recovered - 2 per cent below May's total but 4 per cent higher than June 2023. Of this, 161,000 tonnes came from new scrap and 144,000 tonnes from old scrap. As recovery climbed, import needs eased: February's scrap imports, for instance, fell nearly 6 per cent from January.

Tariffs redefine market behaviour

The biggest catalyst for change came from Washington. On March 12, 2025, the Trump administration imposed a 25 per cent tariff on all aluminum imports under Section 232 of the Trade Expansion Act, citing national security concerns. The measure revoked previous country exemptions and phased out exclusion processes, effectively resetting the US aluminum trade environment.

Then, on June 4, the tariff doubled to 50 per cent for both steel and aluminum imports, tightening import flows further. While these measures discouraged inbound shipments, exports remained unaffected, allowing US recyclers to maintain sales abroad - and even benefit from strong international demand.

Global buyers drive the outflow

Outside the US, demand for recycled aluminium remains robust. Nations in Asia and Latin America continue to absorb large volumes of US scrap to feed their growing recycling industries. China, which has doubled its aluminum scrap imports since 2020, plans to produce 15 million tonnes of recycled aluminum annually by 2027 - a key factor behind steady U.S. exports.

In 2025, Mexico emerged as the largest buyer of US aluminum scrap, taking 28.9 per cent of total shipments, largely for use in automotive and manufacturing sectors. Canada followed with 22.3 per cent, underscoring the tight integration of North American supply chains. Other top destinations included Malaysia (9 per cent), Thailand (6.3 per cent), India (5.8 per cent), South Korea (4.8 per cent), and Hong Kong (4.1 per cent) - a reflection of how widely American scrap now circulates.

Weaker domestic demand creates surplus

Within the US, however, aluminium demand softened. Industrial orders across North America fell 4.4 per cent in the first half of the year, leaving more scrap available for export. Primary aluminium imports from Canada continued to meet most manufacturing needs, but domestic scrap utilisation slowed, pushing recyclers to seek overseas buyers instead.

Scrap's strategic and environmental value

The Aluminum Association estimates that the US consumes between 5 and 6 million tonnes of scrap annually while exporting more than 2 million tonnes. Yet the nation still faces a 3.5 million tonne shortfall in unwrought aluminum, most of it covered by imports.

Analysts suggest that recycling more of that exported scrap domestically could offset up to half the supply gap. Because recycling requires only 5 per cent of the energy needed to produce new aluminium, such a shift could save around 31 billion kilowatt-hours each year  equivalent to the annual power use of three million U.S. homes.

The aluminum recycling industry already supports more than 500,000 American jobs, making it a key pillar in the nation's broader energy efficiency and sustainability strategy.

By mid-2025, it became clear that aluminum scrap had outgrown its image as industrial residue. It is now a strategic material - a cornerstone of both trade policy and environmental planning.

Note: This article is published in accordance with an article exchange agreement between Mysteel and AL Circle.