Lead times, scrap trends, trade talks and more

AMU’s May aluminum market survey found growing strain between a tightening physical market and cautious purchasing behavior across the supply chain. Nearly half of respondents said lead times were extending, while an equal share described them as stable. A small minority noted shrinking lead times. That’s a shift from April, when fewer than one-quarter reported extending lead times, while more than three-quarters described conditions as stable.

Meanwhile, the scrap market showed signs of stabilization after respondents spent March and April signaling tighter scrap availability and rising used beverage can price expectations. Respondents overwhelmingly said enough obsolete scrap existed to meet demand in May, even as expectations for freight and container costs moved higher and views on the direction of the Midwest premium remained relatively firm. Respondents appeared less concerned about locating scrap units than about the cost of moving and replacing them.

Middle East

The LME 3-month price is elevated and expected to remain high as the Iran war continues. Supply is going to remain tight, as inventories already were low before the conflict started in late February. Estimates of the global deficit range between $1 million and $2 million. CRU Group, the parent company of AMU, forecasts a shortage of about 1.4 million tons in 2026, followed by about 300,000 tons in 2027.

Global shipping volatility is tightening its grip on metal supply chains. And the risks are not easing; in fact, they’re escalating, according to Anton Posner, CEO of Mercury Resources. On a recent SMU/AMU Community Chat, Posner discussed the current logistics environment shaped by geopolitical tensions, soaring fuel costs, and structural chokepoints from the Strait of Hormuz to the Panama Canal. “It seems like we’re in for a wild, wild ride,” Posner said.

Century Aluminum said it has been able to offset some displaced supply from the Middle East with its Mt. Holly expansion in South Carolina.

Current disruptions are hitting some value-added products harder than primary metal. That was a recurring theme during recent presentations during the CRU World Aluminium Summit 2026 in London, where speakers examined how conflict-related disruptions across the Gulf Cooperation Council (GCC) region are tightening supply of billet, slab, rod, and primary foundry alloys.

Primary aluminum production trends continued to diverge by region through April. Output among GCC countries dropped sharply, while producers in Europe and North America slowly restored portions of previously idled capacity.

Trade

US Commerce Secretary Howard Lutnick said last month the US should pursue separate, bilateral trade negotiations with Canada and Mexico instead of renewing the US-Mexico-Canada Agreement (USMCA). “USMCA shouldn’t be USMCA. It should be the US and Mexico, and the US and Canada,” Lutnick said. The remarks come ahead of the joint review of deal, which replaced NAFTA, on July 1.

Chinese beverage can sheet shipments to the US increased sharply during the first four months of 2026 and most of May, even as the market operated under a tariff structure and pricing environment that would seem to favor domestic supply or alternative import sources.

“North American aluminum demand showed resilience in 2025, finishing the year essentially flat despite ongoing economic and trade uncertainty,” Charles Johnson, president and CEO of the Aluminum Association, said.

Construction

Recent building and construction indicators pointed to a market that strengthened entering the second quarter of 2026, though the improvement remained concentrated in specific categories rather than a broad uptick across the construction sector. Data center planning and infrastructure backlogs helped drive activity.

AMU also examined activity by large contractors and from megaprojects.

Transportation

At the CRU World Aluminium Summit 2026 in London, CRU Senior Analyst David Leah argued aluminum demand in light vehicles will continue to increase through 2030, though the industry’s position inside next-generation vehicle platforms is becoming less straightforward than earlier electric vehicle adoption narratives suggested.
“We expect aluminum demand to continue to rise over the forecast horizon,” Leah said, adding that “the pace of growth will really vary” depending on region, vehicle segment, powertrain type and product.

Honda is restructuring its automobile business, discontinuing the launch of three electric vehicle models in North America, and focusing on hybrid models as EV demand has not met forecasts. It is the latest automaker to scale back EV targets in favor of hybrids and traditional, albeit more efficient, internal combustion engine vehicles. General Motors, Ford Motor Co., and Toyota have also retreated from electrification targets as North American consumers have not adopted EVs as quickly as hoped and the Trump administration removed tax incentives for EV purchases. Honda also cited tariffs as a contributing factor.

Commercial transportation data entered the second quarter of 2026 points in two different directions. Orders for Class 8 vehicles, such as heavy-duty commercial trucks used in long-haul freight, increased sharply during the first four months of the year, according to both ACT Research and FTR Intelligence, while trailer demand remained comparatively restrained despite many of the same freight market discussions surrounding the broader commercial transportation sector. The divergence complicated what otherwise might appear to be a straightforward freight recovery narrative.

Around the market

Novelis expects to restart its hot mill in Oswego, N.Y., earlier than expected. Novelis executives said May 19 that it has begun cold commissioning the facility. Fires damaged the facility in the fall. “We will have coils coming off the mill within the next few weeks, well ahead of our previous guidance of end of June in the fourth quarter,” said Steve Fisher, president and CEO.

Alcoa Corp. plans to invest $65 million to expand foundry production capabilities to include recycled content in the casting process at its Mosjøen smelter in Norway. The upgrades are expected to increase capacity by up to 75,000 metric tons.

AKFA Aluminum Solutions US LLC broke ground on its proposed manufacturing facility in Bowling Green, Ky. The project marks the first Uzbekistani company to the US manufacturing base.

Texarkana Aluminum used its new Mino four strand hot tandem line to produce the first coil at its Texas facility. The Texarkana, Texas-based facility added the Mino extension to its existing single-strand reverse hot mill converting the facility to a “1+4 Hot Rolling Line.” The addition transformed TKA’s facility into one in which the existing mill functions as a roughing stand, and the new install produces hot finishing strands.

Nexans plans to buy Republic Wire, a US-based manufacturer of low-voltage copper and aluminum wire products headquartered in Cincinnati, Ohio. The company values the transaction at about €680 million (USD$795 million).

Labor

Workers represented by the United Steelworkers (USW) ratified a new, three-year master contract with Arconic, covering roughly 3,400 workers in Davenport, Iowa; Alcoa, Tenn.; Lafayette, Ind.; and Massena, NY.

Meanwhile, Alcoa workers represented by USW plan to resume negotiations with the Pittsburgh-based aluminum producer this month after rejecting a tentative agreement with the company.