Aluminum prices to rise again? EU plans to restrict exports of scrap aluminum, global supply may tighten again.

EU Trade Commissioner Maros Sefcovic said on Tuesday that the European Commission plans to restrict the export of waste aluminum from the EU to prevent large quantities of the metal from flowing out of the EU and causing a shortage of the raw materials needed to achieve decarbonization in related industries. According to the industry organization European Aluminium, the export of EU aluminum waste reached a record high of 12.6 million tons in 2024, an increase of about 50% compared to five years ago, with most of it being shipped to Asia. Industry representatives in the EU say the situation has become more severe since US President Trump imposed a 50% import tariff on aluminum and a 15% tariff on scrap metal. These tariff measures have increased the import volume of scrap materials to the US while reducing its export volume, leading Asian buyers to pay more attention to supplies from the EU. The EU executive began monitoring export situations in July and stated that it will evaluate whether action needs to be taken. Sefcovic said at a conference in Brussels hosted by the European Aluminium Association, "Today... we are starting to prepare a new measure to address the issue of exporting aluminum waste." He added that the measure is planned to be implemented in the spring of 2026 and will be "balanced", taking into account the interests of producers, recyclers, and downstream industries. In addition to being a resource for domestic producers, waste plays a crucial role in the decarbonization efforts of the industry, as recycling aluminum consumes only 5% of the energy consumed in producing metal from mined bauxite. The European Recycling Industries Confederation (EuRIC), which opposes the implementation of restrictive measures, stated that the phenomenon of waste exports is due to insufficient domestic demand and the EU's limited capacity to handle mixed waste (such as waste from scrapped vehicles). Aluminum is widely used in various fields, from soda cans to construction to the recent booming development of AI data centers. In terms of material properties, aluminum has several key characteristics: lightweight, corrosion-resistant, good conductivity and heat transfer, and 100% recyclable at low cost, which align very well with the global long-term trend of "decarbonization + electrification + digitalization", making aluminum a fundamental material for almost all major industrial sectors globally, including transportation, construction, power, packaging, electronics, etc. As a result, with the impact of tariffs and China's production capacity restrictions, the global supply and demand balance in the aluminum industry is tight, leading to recent fluctuations in aluminum prices. Currently, the LME aluminum price is hovering around $2,800 per ton, continuing to sit at its highest point since 2022. Wall Street analysts, including senior analysts from Morgan Stanley and Citigroup, generally expect that the current global background will push the global LME aluminum benchmark price to rise above $3,000 per ton.