AMU Survey: Scrap availability rebounds as logistics costs rise

Survey 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.

Scrap availability rebounds

About 93% of respondents in May said enough obsolete scrap existed to meet demand, up sharply from 62% in April and 47% in March. The May reading marked the highest share of “Yes” responses since the survey began in March 2025.

Separating scrap recycler and processors from the larger respondent pool mostly aligned with the overall survey results. Every scrap recycler and processor respondent said enough obsolete scrap supply was available to meet demand.

March and April survey pointed toward tightening scrap availability alongside firmer used beverage can scrap (UBC) price expectations and rising freight costs. By May, respondents more broadly indicated enough scrap existed to meet demand, and UBC scrap price expectations moderated, while every respondent noted higher freight and container costs.

Trade data may help explain part of that shift in sentiment. US scrap imports increased sharply through the first quarter according to the US Census Bureau, though the extent to which those additional units had fully reached the market by the mid-April survey period remained less clear.

Breaking out scrap imports

US aluminum scrap imports totaled about 265,871 metric tons, up 31% from the prior year period.

Year-over-year comparisons also carry some distortion because the increase in Section 232 aluminum duties to 25% did not take effect until mid-March 2025, meaning most of Q1’25 occurred under the prior tariff structure.

That said, January, February and March 2026 aluminum scrap import totals each marked the highest monthly levels since the Section 232 change took effect roughly a year ago. In other words, among monthly totals recorded from April 2025 through March 2026, the first three months of 2026 remained the highest import periods in the last year of data.

Still, the increase in overall aluminum scrap imports was not distributed evenly across all categories. Recyclable used beverage containers accounted for about 18% of Q1’26 aluminum scrap imports, totaling about 47,949 metric tons, down from roughly 61,472 metric tons during the same period in 2025 when UBCs represented closer to 30% of total aluminum scrap imports despite a lower overall import baseline.

The largest increase came from the broad “other recyclable aluminum” category, which more than doubled to nearly 100,000 metric tons imported during the first quarter of 2026. That category likely captured a substantial share of obsolete scrap flows because it differs from more specialized HTS classifications such as recyclable used beverage containers, recyclable aluminum from industrial processes, and recyclable aluminum auto and truck wheels.

“Other recyclable aluminum” is differentiated from recyclable used beverage containers, which occupy a more specialized position within the aluminum scrap market because beverage can sheet producers typically require tighter specifications such as runaround scrap and new mill-grade scrap.

UBC price expectations

UBC pricing expectations likely reflected a different market dynamic as imported UBC volumes are typically limited compared with overall domestic beverage can sheet production, particularly given the scrap utilization rates of major US rolling mills can sheet.

About 73% of respondents expected UBC prices to remain stable in May, while 18% expected higher prices and 9% expected lower prices. The “Stable” share marked the highest level since the survey began tracking the question in July 2025.

May’s results came after the share of respondents anticipating higher UBC prices in the upcoming month reached 36% in March and 42% in April, both among the highest readings in the survey’s history.

Recycler and processor responses again tracked closely with the broader survey. Most expected stable UBC pricing, while a smaller share anticipated higher prices. None expected lower prices.

The pullback in higher UBC price expectations appeared to coincide with improving scrap availability rather than weakening demand conditions.

In response to other survey questions, scrap recycler and processor respondents generally described demand as stable or improving. Most said they were keeping inventories steady rather than building or drawing down.

Logistical pressure and the Midwest premium

Every survey respondent said freight costs were increasing in May. That marked the highest “Increasing” share in the survey’s history and followed April, when 73% reported rising freight costs.

Container cost sentiment also moved higher again in May. About 62% of respondents expected “Increasing” container costs, while 38% expected “Stable” costs. None expected “Declining” costs.

Energy markets likely contributed to those views, as crude oil prices moved sharply higher during March, April and May as the Iran war disrupted broader energy market sentiment. For a frame of reference, the West Text Intermediate (WTI) benchmark traded in a range of roughly $55-$65 per barrel earlier in the year before oscillating between a range as wide as $75 to above $110 per barrel during the March, April and May.

At the same time, responses were mixed on the Midwest premium’s near-term direction even as transportation cost expectations continued to move higher.

About half of respondents expected the Midwest premium to increase in the following month, down from April but still above March levels. Meanwhile, about 38% of respondents expected flat pricing and 12% expected lower pricing.

While the May reading marked the third-highest share of respondents expecting higher Midwest premiums in 15 months of survey data, it remained well below the 64% reading recorded in April.

In the survey’s history, Midwest premium expectations have been generally distributed more evenly across the three potential responses (“Increasing”, “Stable” and “Declining”), with several months clustering within roughly the same 15 basis points of May’s reading.

Putting it together

Since logistical costs typically feed into delivered aluminum replacement costs, the mixed Midwest premium outlook is notable given that every respondent saw increased freight costs in May.

It may indicate that some respondents viewed transportation costs as elevated without necessarily expecting those increases to continue heading into June or that the market viewed the Midwest premium as already accounting for a substantial share of replacement costs.

CRU Group’s first recent assessment of the US Midwest Premium since the survey closed rose to $1.18/lb, up from $1.14/lb from earlier in May, which climbed even higher to $1.20/lb in its most recent assessment on 28 May. (CRU Group is the parent company of AMU.)

Moderating UBC price expectations may have highlighted the same market views, since UBC transactions are commonly priced as a percentage of the Midwest transaction price. Outright UBC prices can still change even if buying spreads remain stable, depending on movements in the underlying London Metal Exchange cash settlement and Midwest premium.

In practice, market participants may have anticipated widening buying spreads, stable percentage-based buying spreads or relatively unchanged Midwest transaction pricing moving forward.