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All About Aluminum May Forecast

What’s new in the world of aluminum you ask? Everything and nothing.

That may seem like a cop-out response but I assure you I’ll answer in greater detail. If you've been reading the past couple of months you may have noticed that I’m not bashful about giving my opinion on where things are headed. These past couple of months should also have highlighted that I’m not always correct. But hey, you can’t hit the shots you don’t take, right?

First for the “everything” part of the answer. Aluminum prices ended March at $1.22 but as soon as the calendar flipped to April they ran up to $1.38 before settling back a bit and finding some stability. The biggest catalyst for the upward momentum was new sanctions from the US and UK on Russia, namely that any Russian produced aluminum after 4/13/2024 would be banned from LME warehouses. This measure has been floated periodically since the Ukraine invasion but actually went into place mid-month. The truth of the matter is, nearly all primary aluminum moves directly from manufacturers to consumers without ever hitting an LME warehouse. But over the beginning part of 2024, an influx of Russian primary aluminum had been weighing on LME pricing. With this ban in place, Russia no longer has an infinite backstop of the LME warehouses to sell into. The intent was to limit Russia’s revenues from metals, forcing Russian metal to trade at a discount while also propelling the LME forward. A week later, Mexico announced tariffs on certain imported aluminum products to the tune of 20-35%, depending on the form. There is still a decent amount of uncertainty regarding how long these tariffs will be in place and what, if any, exemptions may exist.

Now for what hasn’t changed – scrap tightness and lingering inflation. A common thread over the past 3 months in this column has been the lack of scrap and general tightness in the market. I was of the belief that things would loosen up quite a bit over the summer. And while they still may, my thinking now is that we’re in it for the long haul. Recent inflation readings appear to be pushing the Fed to leave interest rates untouched until late this year if not 2025. Those elevated rates coupled with higher everyday costs haven’t yet taken their toll on consumer spending but have manifested in slumping consumer confidence (which is usually a precursor to downturns in spending).

Another fundamental difference regarding scrap availability this year appears to be in a shift toward domestically manufactured aluminum feedstocks. Imported aluminum semi-finished and finished goods ultimately means imported aluminum scrap. Increased domestic capacity, along with tariffs, desires for shorter lead times, and recycled-based material have created a step change in the scrap market. And while we will still see seasonal ebbs and flows, I believe we have entered a new era domestically that will only continue to be compounded by the additional upcoming expansions.

Looking forward for pricing, I am bullish on Midwest premiums (largely thanks to the Mexican 35% duty on P1020 imports). I could go either way on the LME but ultimately feel the high interest rate environment will weigh on consumer spending will result in lower LME levels by way of reduced demand for primary metal. Scrap spreads should continue to be fairly consistent in the short term although I could see some slight loosening in segments as warmer weather flows start to pick back up.

Please, contact me with feedback, ideas for future topics, or offerings on aluminum scrap. I can be reached at 440-813-6325 or

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