China’s aluminum scrap imports seen declining in coming months amid US tariffs: participants

China's aluminum scrap imports are likely to decline in the next few months as higher prices due to tariffs weaken arbitrage opportunities, industry sources said March 31.

The US recently imposed 25% tariffs on all aluminum imports, triggering a decline in usage of primary aluminum due to rising costs, the sources said. As a result, the conditions became favorable for higher consumption of aluminum scrap, reducing supply and boosting prices, they said.

The US has not imposed any import tariffs on aluminum scrap so far.

"US' exports of aluminum scrap to China and Southeast Asia might both see a reduction, given that the country is increasing its imports," said a Chinese aluminum trader.

A China-based consumer checked with buyers who import scrap and said it has become harder to import scrap into Malaysia.

A Chinese aluminum diecasting alloy 12 producer said offer prices for scrap imports have increased and it was unable to afford the material.

"The US is now showing interest in our scrap, they've started to export to the US because of the new tariffs. It now makes sense for them to buy scrap in Europe rather than primary aluminum in Canada because the tariffs currently don't apply to scrap," said a Germany-based scrap buyer.

The US was the largest aluminum scrap exporter to China until 2020, although its exports to China have dropped significantly since 2018, according to Chinese customs data.

China imposed 25% retaliatory tariffs on US aluminum scrap in April 2018 and implemented stricter import measures on imported scrap.

Southeast Asian countries of Malaysia and Thailand have become key distributing centers for aluminum scrap over the past few years, as the US increased its aluminum scrap shipments to the region following the decline to China.

Malaysia replaced the US as the largest aluminum scrap supplier to China in 2021, but China's imports from Malaysia declined from 2023 after the Malaysian government imposed stricter measures on the scrap metal trade.

Thailand became the largest aluminum scrap supplier to China in 2024 and China's imports from Thailand soared 103.4% from a year earlier to 79,830 mt in the first two months of 2025, accounting for 24.7% of the country's total, according to Chinese customs data.

EU's potential move on scrap

"The EU is considering to implement(opens in a new tab) an export tax on scrap materials, which could significantly affect the flow of scrap exports," said a Japanese ADC 12 trader. The introduction of such tariffs would have a broad impact, affecting all regions that rely on EU scrap exports, the source added.

Prices for scrap materials in Asia are expected to rise as a result of these potential tariffs, he said.

European aluminum scrap has historically had a strong export market, with large volumes exported to Asia. However, the market now faces a new challenge with the rapid shift in trends, driven primarily by US tariffs, adding a new dynamic to global trade flows.

China's aluminum scrap imports from EU countries totaled 41,900 mt over January-February, up 6.8% from a year earlier and accounting for 13% of its total imports, Chinese customs data showed.

European aluminum scrap prices have been rising since mid-January due to limited scrap availability.

Platts, part of S&P Global Commodity Insights, assessed European aluminum scrap high-grade auto shreds at Eur1,930/mt DDP Germany March 28, after reaching Eur1,940/mt over March 24-25, the highest level since Platts started the assessment in January 2024.

Scrap availability remains low in Europe, but there was some optimism that the export market had weakened, increasing the domestic supply, European sources said.