Business is booming for fresh aluminum, thanks to the trade “discussions” between the U.S. and China. Those companies that turn old cars and beer cans into good, new aluminum are prospering currently.
According to market forecaster, Harbor Aluminum Intelligence, aluminum made from recycled scrap comprised the majority of aluminum used in the U.S. for the first time last year. The data from U.S. government reports on aluminum production and scrap usage have been tracked since the 1920s. According to a WSJ article, Luke Palen, president of Spectro Alloys Corporation, separators of aluminum from other scrap metals, says that “there’s a huge win for domestic recyclers and producers.” Spectro is buying more sorting equipment and adding a furnace to melt more scrap. Tariffs recently imposed by the current administration on foreign aluminum drove imports of the metal down 20% in 2018. The intent of the tariffs had been to push up U.S. aluminum production – seems like that is working out just as planned. Matt Kripke, president of an Ohio scrap broker, declares that “it’s a complete buyers’ market.” The U.S. generates more aluminum scrap than any other country – much from old cars, demolished buildings and factory waste. So, when China retaliated with a 50% tariff on scrap aluminum, the answer was obvious – use the scrap metal at home in the U.S. to produce new aluminum. I’m told that those companies that buy and sell scrap aluminum but don’t process it into new product are being hurt slightly by the existing situation. I’d say, therefore, that the solution should be clear-cut – expand business into scrap processing. A number of companies are already switching over to take advantage of the new windfall – scrap processor Metal X Incorporated plans to start melting scrap into aluminum ingots for the first time by 2020. Other companies are in the process of using recycled aluminum to make parts for use in window frames, auto parts and air conditioners. So, from the ground up, the aluminum business is booming. I think that sounds like it might qualify for being a part of the overall plan of making American great again.