- Premium exceeds $1,500/t in Apr’25
- Tariffs push shift toward aluminium recycling
Mysteel: The United States is grappling with a widening aluminium supply-demand gap as domestic primary production continues to shrink and import costs surge under a 50% tariff regime. By end-2025, aluminium demand is projected to reach 4.9 mnt, while domestic output is expected to barely touch 0.66 mnt, far below requirements.
Imports, though averaging 0.327 mnt per month in early 2025, have shown sharp month-to-month declines, weighed down by a spike in the Midwest premium, which jumped 75% in just four months and has now exceeded $1,500/t. Even if imports sustain at the current average, the US will still fall short of demand, risking supply deficits and potential demand destruction for downstream industries.
Amid this imbalance, recycling emerges as the most viable solution. The US already recovers about 3.6 mnt of aluminium scrap annually yet exports more than 2 mnt of it. Redirecting this scrap to domestic recycling plants could offset nearly half of the country’s current import dependence — equivalent to building four new smelters. Scrap is also tariff-free, offering a strong economic incentive for recyclers to expand capacity, especially as US scrap imports rose to 0.276 mnt in Jan-Apr 2025, while exports slightly declined.
Unlike traditional smelters that demand $4-6 billion in investment and 5-6 years to build, a recycling plant requires just $365 million-$2.5 billion and can be completed in 1-2 years. More critically, recycling uses only 8.3 gigajoules of energy per tonne versus 186 gigajoules for primary production, making it both cost-effective and energy efficient.
In effect, while tariffs are raising near-term costs and supply risks, they are also accelerating a structural shift toward recycling, positioning it as the fastest and most sustainable path to aluminium self-reliance for the US.
Note: This article is published in accordance with an article exchange agreement between Mysteel and BigMint.
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