As resource security and decarbonization become increasingly important, major economies are strengthening efforts to retain aluminum scrap. From the EU's review of export controls and the U.S. strategic asset proposal to Japan's circular economy initiatives and policies in the UAE and South Africa, these developments could reshape global scrap flows and affect secondary aluminum markets.

Novelis has published Environmental Product Declarations (EPDs) for selected aluminium products in its European architecture and construction portfolio, providing transparent and independently verified environmental data for customers. The EPDs cover primary aluminium, high-recycled-content alloys and anodized products containing more than 90% recycled aluminium. The company said demand for low-carbon and high-recycled-content aluminium continues to rise as environmental regulations and sustainability certification requirements tighten across the European construction sector. Markets believe the new EPDs will further support the adoption of circular and low-carbon aluminium materials in building applications.

Aluminum Bahrain (Alba) is expected to acquire Aluminum Dunkerque, Europe’s largest primary aluminum smelter, in a USD2.2 billion deal, subject to EU Foreign Subsidies Regulation (FSR) clearance and other approvals. Aluminum Dunkerque produces around 300,000 tones of aluminium annually, and the acquisition is expected to strengthen Alba’s global low-carbon aluminum strategy. At the same time, French state investment bank Bpifrance will invest EUR100 million for a 6% stake and join the company’s board. Markets believe the deal could further strengthen Europe’s low-carbon primary aluminium supply chain amid growing regional demand for sustainable aluminium.

[SMM Aluminum Express News] Rio Tinto has begun commissioning its US$1.5 billion AP60 low-carbon aluminium smelter expansion at Complexe Arvida in Quebec. The project will add 160,000 tpy of primary aluminium capacity through 96 new AP60 pots, lifting AP60 production to 220,000 tpy by the end of 2026. The expansion, together with a planned recycling centre, is expected to offset production losses from the closure of older Arvida potlines while strengthening North America’s low-carbon aluminium supply.

[Conflict Impact] The outbreak of the Middle East conflict on February 28, 2026, significantly disrupted global aluminum market dynamics, driving increased volatility in aluminum prices. Aluminum prices on the London Metal Exchange (LME) surged alongside escalating tensions, rising from an Official Price of $3,156.5/mt on February 27 to a peak of $3,519.5/mt in early March. Prices later retreated to the $3,200–3,300/mt range in late March, as market sentiment gradually stabilized. On March 28, in response to attacks on Iranian industrial zones, Iran reportedly targeted major regional aluminum producers including Aluminum Bahrain and Emirates Global Aluminum, while Qatar Aluminum declared force majeure. These developments constrained primary aluminum output in the Middle East, tightening market liquidity and increasing supply uncertainty. As a result of supply disruptions, global aluminum availability declined, particularly impacting regions outside China in Asia. Entering April, LME aluminum prices rebounded to $3,400–3,500/mt, breaking above $3,600/mt in mid-April and fluctuating within the $3,500–3,600/mt range. [Shipping Disruptions] The conflict initially disrupted transportation systems across the Middle East, with the Strait of Hormuz being most severely affected. Key aluminum exporters—including the UAE, Saudi Arabia, Qatar, Iran, and Kuwait—faced significant logistical constraints. Exports that traditionally passed through the Strait were heavily restricted, forcing market participants to adopt alternative logistics routes, including land transport to Red Sea ports. These adjustments significantly increased freight costs and extended delivery lead times. In April, the escalation of conflict into the Red Sea region further limited alternative shipping routes. Most Europe–Asia vessels opted to reroute via the Cape of Good Hope, driving both freight costs and transit times higher. According to SMM market research, cargo delivery delays reached 3–5 weeks, while container freight costs surged by as much as 60–70%. [Primary Aluminum and Processing] Reduced Middle Eastern exports tightened primary aluminum supply across major Asian consuming countries, particularly Japan, Thailand, India, and South Korea. In 2024, the Middle East exported 6.408 million mt of primary aluminum and key aluminum products, with these four countries accounting for approximately 20.8% (1.331 million mt). In 2025, exports declined to 6.071 million mt, with imports from these countries totaling approximately 1.215 million mt (~20%). Demand for primary aluminum alloys and billets (notably 6xxx series) remained strong. SMM data shows that following the outbreak of conflict, processing fees for 6063 billets in Southeast Asia rose from $200–250/mt to $250–300/mt, peaking at $300–310/mt. Market feedback indicates a recovery in demand for 6xxx billets, with both domestic and export transactions in Malaysia and Thailand increasing significantly in April. Downstream purchasing sentiment improved, offsetting weaker market conditions observed in January–February. Demand for primary foundry alloys also strengthened. Elevated aluminum prices, reduced Middle Eastern supply, and growth in downstream sectors such as automotive (particularly in Thailand) drove increased enquiries for alloys including A356, AlSi10MnMg, and AlSi10FeMg. Notably, interest in low-carbon aluminum has also increased, reflecting rising alignment with international decarbonization policies such as the EU’s Carbon Border Adjustment Mechanism (CBAM). Against a backdrop of tightening primary supply, importing semi-finished aluminum products from alternative regions may become an increasingly viable option. [Secondary Aluminum] Beyond primary production, the Middle East has also been a significant supplier of aluminum scrap and secondary alloys, serving as an emerging recycling and processing hub prior to the conflict. India and South Korea are key importers of Middle Eastern scrap. In 2024, the region exported 628,000 mt of aluminum scrap, with India and South Korea accounting for 62.6% and 13.5%, respectively. In 2025, total exports rose to 766,000 mt, with imports reaching 489,000 mt (India) and 101,000 mt (South Korea). Amid the conflict, buyers from Japan and South Korea diversified sourcing toward Southeast Asia, particularly Malaysia and Thailand, boosting demand for ADC12 secondary aluminum alloy. This shift supported both Southeast Asian FOB prices and Japan CIF prices. In April, continued conflict escalation drove additional demand from India, with SMM data indicating several thousand tonnes of incremental enquiries and transactions in Southeast Asia. SMM began tracking ADC12 FOB prices in Thailand and Malaysia in March 2026. Prices rose from $3,000/mt on March 2 to $3,365/mt by April 27, marking an increase of $365/mt. Market activity remained robust, with strong exports to Japan, South Korea, and India, alongside steady shipments to China, Singapore, and other regions. Some producers have reportedly secured orders through late June to July. On the raw materials side, rising LME aluminum prices pushed both imported and domestic scrap prices higher. In Thailand, aluminum cable scrap reached THB 115,000–120,000/mt ($3,560–3,710/mt) in April, significantly increasing blending costs for billet producers. As scrap prices climbed, some billet producers reduced scrap usage and increased reliance on primary aluminum. Meanwhile, higher prices for Tense scrap led to reduced trading volumes, prompting ADC12 producers to substitute alternative scrap types, including higher-copper materials, to optimize cost structures. Reduced scrap supply from the Middle East also intensified competition, particularly as India increased procurement from alternative markets, tightening supply and driving prices higher in Southeast Asia. [Outlook] The Middle East conflict has fundamentally reshaped aluminum trade flows across Asia and globally, increasing pressure on Southeast Asia’s aluminum processing sector. If the conflict persists, global aluminum trade is likely to become more regionalized, with tighter raw material availability in Asia and stronger internal circulation in Western markets. China may emerge as a key balancing supplier, as widening domestic-international price spreads could open export arbitrage opportunities for semi-finished aluminum products and secondary alloys. However, Southeast Asia may face mounting pressure from raw material shortages and intensified competition, particularly from India. At the same time, tightening low-carbon policies and Western supply chain reshoring may further challenge regional competitiveness. Conversely, a de-escalation of the conflict and normalization of logistics routes could ease supply constraints, potentially placing downward pressure on aluminum product and secondary alloy prices, gradually returning the market toward pre-conflict conditions. [Notes] The “18 Middle Eastern countries” referenced in this report include: Gulf Cooperation Council (GCC): Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman, Bahrain Levant region: Israel, Jordan, Lebanon, Syria, Palestine Other key regional countries: Iran, Iraq, Turkey, Egypt, Cyprus, Libya, Yemen Primary aluminium and related key aluminium products include the following HS codes: 7601 – Unwrought aluminium 7604 – Aluminium bars, rods and profiles 7605 – Aluminium wire 7606 – Aluminium plates, sheets and strip, thickness > 0.2 mm 7607 – Aluminium foil 7608 – Aluminium tubes and pipes

[SMM Aluminum Express News] Alvance British Aluminium has boosted output by ~10% at its Lochaber smelter in Fort William, Scotland (UK’s only primary aluminium plant), thanks to recent US tariff changes. The GFG Alliance-owned facility (48,000 tpy capacity, hydro-powered) now exports about half its production to the US for the first time. Managing Director Tom Uppington: “We increased production in response to shifting trade flows after US tariffs, entering the US market while serving UK and European customers.” President Trump set a 50% global tariff on steel/aluminium imports, but the UK secured a preferential 25% rate (vs. 50% for Canada), making UK metal more competitive. The US still relies on imports for automotive and aerospace sectors.

[SMM Aluminum Express News] Construction completion expected by end-Q1 2026. Plant capacity: 185,000 t/y (UAE’s largest), producing low-carbon billets & T-bars from post- & pre-consumer scrap blended with primary aluminium. Features: 150,000 t/y scrap sorting (shredding, magnetic/mechanical/X-ray), 90,000 t/y melting furnace (~750°C, heat-regeneration burners), two 90-tonne holding furnaces for blending & chemistry adjustment. Products: RevivAL (recycled), CelestiAL-R (solar + recycled), MinimAL-R (nuclear + recycled).

The relocation will be carried out through an internal capacity transfer by Yidian Holding Group Co., Ltd., a Chinese aluminium and power producer. Under the plan, the company will transfer 240,000 tonnes per year of primary aluminium capacity from its controlling subsidiary Henan Hengkang Aluminium Co., Ltd. (Hengkang Aluminium) located in Sanmenxia city, Henan, to another controlling subsidiary, Inner Mongolia Dongshan Aluminium Co., Ltd. (Dongshan Aluminium), based in Chifeng city, Inner Mongolia, according to the announcement.

【SMM Analysis】The European Union’s Carbon Border Adjustment Mechanism (EU’s CBAM) took a decisive step from its pilot phase towards actual enforcement in December 2025, only a month before it becomes effective January 2026. The aluminium sector, with a total trade value of USD 448 billion in 2024, faces CBAM's carbon-accounting requirements alongside five other high-carbon sectors. Changes look to favour low-carbon production through responsible sourcing of raw materials and energy usage, as well as rewarding countries taking initiatives to implement equivalents to CBAM. On the flip side, CBAM imposes higher costs on trading partners of aluminium products with high-carbon emission. This series of policies will likely raise aluminium products prices for consumers in the EU in the short-term, and reshape aluminium’s trade flow for years to come. This article will cover CBAM basics and frameworks, incorporate the newest updates of the December 17 package and provide aluminium sector-specific implications and outlooks.

Western Hungary is going to position itself within the global industrial and political networks as it sets to host a new aluminium alloy facility. Backed by EUR 58 million ( USD 63 million) investment, the project introduces advanced US processing technology while anchoring production firmly within Central Europe. Environmental performance sits at the centre of the plant’s design. The recycling-based production method is expected to consume up to 20 per cent less energy than standard recycling operations, and approximately 90 per cent less energy than alumina-based primary aluminium production. With a planned throughput of 4,500 tonnes per month, the facility is intended to operate as a closed system, lowering emissions well below sector averages. Construction is expected to begin within weeks and continue for 23 months. Once completed, the plant is projected to support regional raw material supply and generate hundreds of jobs, positioning REMET Hungary as an early example of an industrial model where sustainability and competitiveness move together.