September is a month of hope in the scrap market. Everyone is hoping that after the holidays, production company shutdowns, there will be a lot of scrap on the market and scrap prices will rise. Unfortunately, for several years now, the formerly familiar cycles on the aluminium market no longer function. At present, geopolitics and, in particular, the unstable situation on the markets caused by duties in the USA, the high cost of transporting metals from Asia due to the Huti attacks and, in the case of Poland, the exchange rate of the zloty, are important.
We will traditionally divide the analysis of the market situation into 2 parts. On 'Premium' scrap, i.e. clean materials such as profiles, clean post-production sheets or sector and aluminium wire. And on scrap for the production of casting alloys.
At this point, I would like to mention that, reviewing my historical analyses of the aluminium market, most of my predictions have been confirmed. I am not saying that this will always be the case, but knowing what is happening in the market allows me to accurately assess the situation and predict trends for the coming weeks.
Analysis of the situation in the Premium Aluminium market.
Given the situation in the finished products market, we are seeing more and more problems for foundries buying premium aluminium scrap.
This is due to limited demand in the automotive and construction markets which make most use of the aluminium 1xxx; 3xxx; 5xxx; 6xxx series.
The only market where there is a stable situation is the food market using mostly aluminium in the 1xxx; 8xxx series.
The production of these alloys also uses primary aluminium, whose stocks at the Port of Rotterdam are decreasing each month and thus the LME price surcharge is increasing. This surcharge has increased by 12% over the past month to 164.2$.
Reduced demand for products for the automotive, construction industry has caused a number of problems in the premium scrap market. Recently, one major foundry in Germany producing flat products has stopped receiving scrap, a foundry near Berlin processing the 5xxx series has declared bankruptcy, another foundry producing ingots for the production of aluminium profiles is planning to stop production.
The aforementioned examples show what the mood of the market is like. It is very difficult for foundries to make a profit from their operations due to the scarcity of scrap, its high cost and the strong competition caused by the lack of demand on the European market.
In my opinion, the situation where the primary thicket is at an all-time low and the foundries' problems in making a profit will lead to a change in the level of premiums and discounts on premium scrap. This will particularly affect scrap such as aluminium profiles, sector, line, 1xxx series sheet, AlMg, and others.
Scrap for the production of foundry alloys
On the scrap market for the production of casting alloys, since August we have been observing falls in the prices of such scrap as casting, plastic, Al. cooler, Al. chips and all types of post-production aluminium mixtures used in the production of alloys from the 46xxx; 47xxx group.
Only the Rim is holding strong and has not seen such large drops due to the high purity of the aluminium used in its manufacture.
The reason for the price drops is, as with premium scrap, a drop in demand in the automotive market. This results in an oversupply of aluminium caterpillars and thus a drop in price.
Observing the situations of foundries involved in the production of casting alloys, we can see a recurring pattern. Most foundries have reduced production by 40%-60%, some German foundries are planning to stop production due to its unprofitability, in August the largest Polish foundry alloy company stopped receiving and purchasing scrap and its Hungarian plant stopped production altogether.
Analysing demand in the die-cast finished goods market also shows a decline in production. Many companies have reduced production by 20-40% due to lack of orders. There are also cases of production of finished aluminium products being taken out to Asian countries such as China or India.
The above shows that things are not looking good in the cast alloy market for today. Low aluminium ingot prices on basic alloys will result in scrap prices remaining at current levels and if ingot prices continue to fall we will see further declines in scrap prices.
To sum up: The market situation seems difficult, in the coming weeks I expect supply problems and price reductions for premium scrap, price stability on scrap for casting alloys.
RM 20.09.2025