Building & Construction
19 June 2025
Week in Review: Margin squeeze and mixed signals
Written by Gabriella Vagnini
Market signals
- Primary aluminum prices in China are nearing 21,000 yuan/mt, but demand hasn’t caught up. Scrap sellers, meanwhile, are holding back.
- LME cash to 3-month is sitting at a $6/mt backwardation, while the Midwest premium rallied 60 points Wednesday to 51.80¢/lb. What it means: Spot showed strength, likely due to late-month positioning or restocking. The rally suggests renewed buyer interest, though overall market momentum looks cautious.
- The Fed held interest rates steady at 5.25 to 5.5% but still signaled two cuts may be on the table later this year. Tariffs were flagged as an ongoing inflation risk.
Spotlight features
- Aerospace scrap’s closed-loop push – Constellium and TARMAC are trying to flip the script on aerospace scrap, not just recycling it, but feeding it right back into the same supply chain. The big question: Who controls the material when circularity becomes real? Read more: The afterlife of aerospace aluminum
- Copper pile-up hits aluminum flows – Copper’s breakdown is jamming up non-ferrous logistics, dragging aluminum down with it. Export controls, arbitrage collapse, and freight delays are stacking up, and it’s starting to hit clean feed. Read more: What copper’s scrap crisis signals for aluminum
- Solar policy risks extrusion demand – Even a 2–5 GW drop in solar installation could pull 40,000–100,000 tons of extrusion demand out of the system. The solar tax fight in D.C. isn’t just about energy – it’s about volume. Read more: Tax incentive rollbacks could dent aluminum demand for solar
- Why China builds smelters so cheap – China’s smelters are still being built at less than half the cost of Western builds, thanks to vertically integrated parks, coal-tied power, and location. Western producers can’t match it without a full reset. Read more: Why China’s aluminum capex stays so low
- China’s full-stack aluminum strategy – Cost is just one piece. China is also outpacing the West in industrial planning, logistics, and scale. While others focus on price, China’s building the whole aluminum playbook. Read more: Can the West catch up with China on aluminum smelter costs
- Window closures flag construction weakness – Oldcastle BuildingEnvelope and Jeld-Wen shutting down production is more than a one-off, it’s a warning sign for commercial construction and extrusion. When top buyers of architectural systems pull back, the rest of the market takes notice. Read more: Parsing construction demand: What Oldcastle and Jeld-Wen closures reveal
Policy and trade watch
- Europe may retaliate against U.S. aluminum tariffs by hitting scrap imports. That could pressure more low-grade aluminum to stay in domestic yards.
- Germany’s Speira is expanding melting capacity to improve scrap recovery and cut emissions – another step in Europe’s recycling tech lead.
The short list
- June 20 – LME aluminum 3-month fix: Will this rally hold or reverse?
- June 24 – Rusal and Alcoa Q2 results: Look for clues on alumina input costs and smelting margins.
- June 26 – U.S. durable goods orders: Key read on downstream industrial demand.
- June 27 – CPI and PPI inflation data: Will it influence Fed timing for rate cuts?
- All week – Scrap pricing across Twitch, 5052, siding, UBC: Watch for margin shifts.
Seasonal check-in
It’s can season, trailer builds are starting, and construction should be peaking. But if demand doesn’t materialize soon, some seasonal lift could vanish. Processors may begin clearing inventory ahead of July 4th if things don’t pick up.
The build board
- A closer look at secondary billet tightness
- Updates on aluminum tariff enforcement
- How EV battery casings may shake up alloy demand in the second half
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