Benefitting from scrap

01.31.19

Companies in the U.S. that turn junked cars and beer cans into fresh aluminum are seeing a business boom thanks to the trade fight between the U.S. and China, reports the Wall Street Journal.

The Trump administration’s tariffs on foreign aluminum drove imports of the metal down 20% last year, while domestic production rose 20%. In fact, aluminum made from recycled scrap made up the majority of the aluminum used in the U.S. for the first time last year.

Pushing up U.S. aluminum production was the tariff’s intent. But domestic smelters that make new aluminum from bauxite aren’t able to supply more than a fraction of the aluminum consumed, even with higher production last year. Instead, much of the increase in domestic production to offset lower imports has come from the processors that make aluminum from scrap.

China also implemented more-stringent quality standards on U.S. scrap exports early last year that started to drive down exports, and then it followed with tariffs totaling 50% on U.S. scrap aluminum, creating a glut for U.S. recyclers to remelt into new aluminum. The U.S. generates more aluminum scrap than any other country. (Source: The Wall Street Journal)


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