Manufacturing expansions, Airbus developments, low recycling rates, and more

Sortera Technologies is working to advance technology to overcome one of the big challenges in scrap: accurate, low-cost sorting to make that material more useful and to keep it from being shipped overseas. The Markle, Ind.-based company recently announced the close of $45 million in funding and plans to fund a second processing facility in Tennessee. Sortera uses proprietary technology equipped with AI-enabled multi-sensor sorting systems with blending capabilities to support customer-specific requirements that can replace imported primary aluminum. The company says it is the only one producing end-of-life recycled aluminum products, including 380, 356, 319, and wrought.

On Jan. 1, a new chief executive took the reins of Constellium SE, the Paris-based aluminum company with a market cap of about $2.3 billion. Chief Operations Officer Ingrid Joerg succeeded Jean-Marc Germain as CEO and joined the board of directors. AMU’s Stephanie Ritenbaugh spoke with Joerg about her experience and her vision for Constellium, which has operations in Europe, North America, and Asia.

The aluminum industry has long been frustrated by its inability to bolster used beverage container recycling rates. The latest numbers are for 2023 and they are at 43%, according to the Aluminum Association and Can Manufacturers Institute. And plastics have it even worse. So how can we improve recycling rates?

What role will aluminum play in data centers as AI spurs demand? Well, aluminum does not play as prominent a role in the AI revolution as copper does, but it will ride on its coattails to some extent. We see aluminum being used in the server racks, cooling units, radiators, and HVAC system in many AI facilities, but aluminum cables are likely not going to be used as extensively. However, if the aluminum/copper ratio continues to expand from the current reading of about 4.5:1 to 5.5:1 or 6:1, it may usher in some aluminum substitution in the critical component category. You can read more here.

As a new year begins, many are asking the question: “What should I hedge?” Hindsight is always 20/20 and there are people who wish they hedged the London Metal Exchange and Midwest premium in 2025. Now, they are challenging themselves with the same question, but at significantly higher entry points. AMU looks at hedging from the perspective of both the LME and Midwest premium, and whether you are approaching the market as a buyer or a seller.

Our AMU Explainer series continued with several topics meant to demystify parts of the aluminum industry:

Backwardation versus contango and why it matters.

Understanding open interest as a guide to price movements on LME

Options as a risk management tool

AMU’s Greg Wittbecker shared his musings on scrap as we wind our way through the winter months, a period when over-the-scale receipts decline. Check out his breakdown of trends by grade and how Section 232 tariffs are coming into play.

What can the market for recreational vehicles (RVs) can tell us about consumer spending? Turns out it’s a good bellwether for consumer sentiment. It also is critical to regional extruders in the Indiana-Michigan-Ohio area and California. Historically, shipments of aluminum extruded products represent about 1%-1.5% of total industry shipments and about 4.75%-5% of shipments to the transportation sector, according to the Aluminum Association. That translates to about 35 million-40 million pounds/year.

In the aluminum world, aerospace is one of those sectors everyone recognizes as important, but it rarely drives the market narrative the way construction, automotive, or packaging does. The tonnage just isn’t comparable. But, what aerospace does have is outsized complexity. AMU’s Nicholas Bell examines this insular supply chain and what recent developments for Airbus mean for this part of the market.

Around the market

Workers at Real Alloy’s Morgantown, Ky., aluminum recycling and secondary production facility have unanimously ratified their first collective bargaining agreement, marking the first negotiated contract between the company and the International Brotherhood of Teamsters.

AKFA Aluminum Solutions US LLC will establish a manufacturing facility in Bowling Green, Ky., marking the first time an Uzbekistani manufacturer has launched manufacturing operations in the US.

The Tomago aluminum smelter in New South Wales, Australia, is getting support from the Australian Federal and state governments to insure its continued operation beyond 2029. The owners had been warning of a potential closure of the facility if it was unable to arrive at a new long-term power contract to replace the existing contract with AGL Energy that is scheduled to expire in 2028.

Momentum Manufacturing Group’s engineered extrusions unit has completed a multi-year expansion and automation project at its Franklin, N.H., aluminum extrusion facility. The project, which began in 2021, increased capacity and added automated material handling and aging systems.

South Korea-based ALUKO Group plans to build a second US manufacturing facility in Lauderdale County, Tenn. The company plans to retrofit a former Tupperware facility in Halls, Tenn., with operations expected to involve a capital investment of about $108 million.

Community Chats

Massimo Grifone, commercial director of Cauvin Metals, discussed, among other topics, the European Union’s Carbon Border Adjustment Tax (CBAM):

“But the way they want to apply this tax is a very complicated and creates a new element of uncertainty,” Grifone said. “Instead of leveling the playing field between producers inside and outside Europe, it just basically further tightens and fragments the European market. So, in Europe, we have a completely new scenario, which has also changed, in a structural way, how we buy, how we purchase, and how we sell aluminum in Europe.”

Timna Tanners, Wells Fargo managing director, spoke about tariffs, smelters, and the outlook for 2026. And she noted that while 2025 may have been the year of TACO, where “Trump Always Chickens Out” and alters steel tariffs, aluminum is a bit of a different game.

“It’s pretty hard to justify building a new aluminum smelter unless you can get a lot of help on the financing or some sort of secure, cheap power deal.”

To catch up on these and other past webinars, or keep tabs on what’s coming up, check out our Events page.