Video•Mar 25, 2026
How US Scrap Markets Are Responding to Aluminum Supply Disruption
The video examines how the recent US‑Israel‑Iran conflict is unsettling the United States scrap aluminum market, a sector that relies on roughly one‑fifth of its primary aluminum imports from the Middle East. Argus senior reporter Alex Nikl outlines the immediate supply shock and its ripple effects across domestic pricing and sourcing strategies.
Key data points include a steady rise then modest pull‑back in LM cash values, a surge in Midwest transaction prices, and widening spreads by domestic rolling mills and extruders for higher‑quality scrap grades. Specific grades such as 50‑52 and 5182 clips have retained tighter discounts, while mill‑qual and extrusion brokers have broadened spreads to counteract the stronger Midwest index.
Nikl cites concrete examples: A356.2 alloy offers have been pre‑emptively raised despite primary aluminum shortages from Canada and tariffs, and exporters of Zorba are shifting to the US east‑coast hub, expecting domestic price declines but facing higher logistical costs. He also notes that Indian buyers may be priced out in the near term, reducing demand.
The broader implication is heightened cost pressure for smelters and downstream manufacturers, especially in aerospace and automotive sectors, while shipping lane congestion could embed higher freight charges into future pricing. Market participants must adjust buying spreads, diversify supply sources, and monitor geopolitical developments to mitigate ongoing volatility.
