Aluminium closed the first half of 2026 as one of the strongest-performing industrial commodities. From mid-February to early June, London Metal Exchange prices gained nearly 29%, reaching levels not seen since 2022. This is not a passing speculative spike, but a structural tightening of supply that has been building over time.
The root cause: scrap leaving Europe
At the centre of this dynamic is a raw material issue: recycled metal. Secondary aluminium covers around 40% of European consumption and is the most efficient route — in terms of energy and emissions — to produce the metal. This is precisely why scrap has become a globally contested resource.
US tariffs introduced in 2025 — which target imported primary aluminium but leave scrap duty-free — have turned the American market into a magnet for European recycled material. Strong Asian demand has added further pressure. The result: in 2024 the European Union exported a record volume of scrap, European recyclers found themselves short of raw material, and buyers now face a tighter market with rising prices.
Euro prices: a double effect
For companies purchasing in euros, the pressure is compounded by the exchange rate. In 2025, a stronger euro had softened the impact of rising dollar-denominated prices. In 2026 the situation has reversed: with the euro weakening again, euro prices are now rising in line with dollar prices, with no buffer left.
A structurally tight market
The scrap squeeze is unfolding against an already tight backdrop. Available stocks are low, European primary production capacity is under pressure from high energy costs, and analyst forecasts for the second half of the year point to prices remaining elevated. European producers have already publicly flagged the risk of a structural decline in continental recycling if no measures are taken to retain scrap within Europe.
Implications for the manufacturing industry
For companies that use aluminium in their production processes, the current environment presents concrete challenges on two fronts: cost and availability. In a market where supply is being rationed, procurement planning and the strength of supplier relationships become real competitive advantages.
Decarbonisation adds a structural variable: European carbon cost mechanisms are raising the price of high-emission primary metal, pushing buyers further toward recycled content — which is already scarce. A contradiction that, in the short term, translates into further price tension.
In this context, market awareness, operational flexibility and a medium-term industrial outlook remain the most effective tools for navigating a phase that is unlikely to resolve itself quickly.