Aluminum Scrap Markets
July 14, 2026
A turbulent year so far for aluminum. CRU looks at 2026 and the months ahead
Written by Stephanie Ritenbaugh
The first half of 2026 has been turbulent for the aluminum market, with the Iran war sparking the largest supply shock in the history of the industry, CRU Group said.
With the year half over, analysts at CRU evaluated their calls from the beginning of the year, how they’ve held up, and the outlook for the rest of the year. The discussion took place during a July 8 webinar hosted by CRU, the parent company of AMU.
Here’s a look at some of those calls.
Scrap
In December, CRU predicted export restrictions on scrap would start to take shape. However, the battle for scrap continues, and the Iran war has made recycled metal even more important. Restrictions will likely be implemented, with the EU positioned to take the lead. But the US could also follow for some grades, such as used beverage cans (UBC).
Ross Strachan, head of aluminium raw materials, noted the European Aluminium association has called not for a blanket ban on exports but a targeted measure.
“Our understanding is that the European Union is considering introducing a 15% tariff on aluminum scrap exports, that, of course, is being driven by the record outflow of just over 1.25 million metric tons last year, primarily to Asia,” Strachan said. “The proposed restriction would try and help to secure raw materials for the EU’s green transition and close some of the scrap drop.”
A decision was expected in the second quarter but was pushed back. The European Commission is now expected to make an announcement in September.
As for in the US, Aluminum Association launched its own campaign late last year, calling for an immediate ban on UBC exports.
“We still firmly have the view that there will be further restrictions going forward as that battle continues,” Strachan said.
Midwest premium
CRU forecast the US Midwest ingot premium reaching its all-time highest average in 2026, due in large part to the 50% Section 232 tariff.
So far, premiums have been higher than anticipated, CRU said.
Tom Rutland, head of non-ferrous metals, noted the US market underwent a structural change between 2016 and 2025, with domestic supply declining and the US becoming more reliant on imported material, causing a small increase in premiums.
In March 2025, premiums spiked when President Trump introduced a 25% Section 232 tariff on all aluminum imports. In June 2025, the rate doubled to 50%, driving premiums higher. Meanwhile, the Iran war placed additional pressure on premiums.
That movement is similar to the trend in the Rotterdam premium.
“What we are seeing in the US is at the extreme at $2,500 a ton. I’d say that is extremely high, and therefore we have been correct in our prediction, and that we have been able to see record high US premiums in 2026,” Rutland said.
Indonesian production
In December, CRU predicted Indonesian primary production would soar in 2026. In fact, it is now expected to increase to 1.7 million metric tons, up from 800,000 metric tons last year, according to Wan Ling, research principal. Three new smelters are set to come online, bringing the total number of plants to six.
“We think maybe in five year’s time, primary production in Indonesia could be like 4.7 million-4.8 million tons,” Ling said.
Bauxite and alumina prices
In December, CRU forecast average lower prices for bauxite and alumina in 2026, which has proven out.
Bauxite prices have been pressured by more shipments out of Guinea, with prices at about $38 per ton.
Alumina prices have been pressured by more production out of Asia. Average prices are about $308 per ton in 2026, compared to about $388 per ton in 2025.
Onshoring
More onshoring was expected in the first half of the year due to tariffs and planned expansions. However, that process was delayed in the first half of 2026.
“We still think the call will occur that we will see onshoring, but, in fact, year to date, it’s been anything but onshoring,” said Paul Williams, head of aluminum value chain.
Williams cited the fires at Novelis’ mill in Oswego, New York, which took that facility offline for months and left customers looking for other sources of material.
“In fact, rolled product imports into the US through the first four months, five months of this year have been very strong indeed, and that means the US is still very much a large importer at the moment.”
However, CRU expects onshoring to begin in the second half of the year as rolling mills ramp up and imports fall further for semi-fabricated products. Novelis’ Oswego mill is back online, the company plans to ramp up the Bay Minette rolling mill, and Steel Dynamics Inc. is commissioning its mill in Mississippi.
Onshoring will impact the auto sector with relocation of production to the US as well, CRU noted.
