【SMM Scrap Aluminium Market Analysis】Southeast Asia's Secondary Aluminum Industry Trapped in "Margin Squeeze": Raw Material Surge Forces ADC12 Plant Cuts, Industry May Enter "Lunar New Year Mode" Early February 2026 marked a period of unprecedented regulatory volatility for the global secondary aluminum and scrap markets. Driven by a confluence of tariff upheavals, aggressive decarbonization mandates, and stringent environmental crackdowns, the traditional flow of aluminum scrap is being fundamentally redrawn. As the United States implements sweeping new import surcharges, the European Union weighs restrictive export measures, and Southeast Asian hubs like Malaysia tighten their borders against contaminated materials, market participants are facing mounting compliance costs and disrupted arbitrage windows. This review examines the key policy shifts that defined the ex-China aluminum recycling sector this month and their immediate implications for global trade flows. The United States: How the 10% Surcharge Disrupts Secondary Aluminum Following the United States Supreme Court’s ruling, which invalidated Trump’s IEEPA tariffs on February 20, 2026, many trade goods found themselves navigating a complicated and chaotic new regulatory landscape. Within hours of the ruling, President Trump pivoted to Section 122 of the 1974 Trade Act, levying a 10% blanket global import surcharge that went into effect on February 24, replacing the former country-based tariffs. There have also been threats made by President Trump to raise this surcharge to the statutory maximum of 15%, which could further disrupt global trade and U.S. imports. Even though most primary aluminum products will not see a huge change due to already being burdened by the 50% Section 232 tariffs, the secondary aluminum market, which formerly enjoyed a 0% tariff under Section 232, might now be caught in the newest 10% blanket import surcharge. The US Geological Survey’s Mineral Commodity Summaries 2026, published in February 2026, estimated an increase in imported scrap into the US in 2025, reaching roughly 890,000 metric tons, which is approximately a 27% increase compared to 2024. Even though scrap imports only make up roughly 20% of the US’s total scrap consumption, a blanket import surcharge will likely affect a significant portion of total scrap imports for the active period of the Section 122 policy. This is especially true as the policy remains highly volatile and faces the risk of being increased or challenged in the near future. Europe: The "Scrap Leakage" Debate and Impending Export Controls The EU aluminum recycling sector is also on edge following the closure of the EU’s public consultation in late January. Currently, trade measures are widely expected to be unveiled and launched during Spring 2026, aimed at curbing what the EU terms "aluminum scrap leakage." European Aluminum, as one of the biggest supporters of trade measures to control scrap leakage, cites outflows exceeding 1.3 million tons annually that could instead be utilized domestically to meet decarbonization and net-zero targets. In February, the Bureau of International Recycling (BIR) released statements opposing these trade measures, stating that "the imposition of export restrictions or trade barriers is fundamentally unnecessary and risks producing significant unintended consequences for the entire value chain." BIR also explained how its own monitoring fails to identify scrap leakage issues, noting that the EU currently has insufficient domestic smelting capacity to absorb the extra scrap that is being exported out of Europe. In the same statement, BIR warned of a probable reduction in domestic aluminum scrap prices and a decline in the overall quality of waste management systems. Similarly, in 2025, the European Recycling Industries' Confederation (EuRIC) published stark warnings against the possible restriction of aluminum scrap exports. In a scenario where all grades of aluminum scrap are restricted from being exported, or if exports are hit with a significant surcharge, the Asian market, especially China, India, and Southeast Asia, all of which are large importers of EU scrap would be heavily impacted. Supply would see significant decreases, and prices outside Europe might climb to new highs as markets adjust to fill the gap, while secondary prices within the EU could drop to new lows due to localized oversupply. Malaysia: The E-Waste Crackdown and Stringent SIRIM Enforcement Following the success of "Ops Metal" in 2025, Malaysia has seen a massive volume of illegal scrap imports seized, amounting to a total value of RM 7 billion. In response to the influx of illegal scrap imports frequently mixed with electronic waste, the Malaysian government implemented an absolute e-waste import ban effective February 4, 2026, in order to curb these environmental violations. While aluminum scrap is still legally allowed to be imported into Malaysia, albeit under strict SIRIM purity requirements, the absolute e-waste ban will inevitably affect certain secondary grades. Notably, Zorba imports will likely see significant increases in transit and processing times, as customs officials are now far more likely to detain such cargoes for exhaustive inspections due to the high probability of e-waste contamination. In the broader picture, the volume of aluminum scrap legally entering Malaysia will likely decrease. Coupled with escalating processing delays at customs, this friction increases the probability that businesses will actively divert their aluminum scrap trade elsewhere in Southeast Asia, such as to Thailand. Conclusion Looking ahead to the second quarter of 2026, the secondary aluminum market will likely remain in a state of flux as these regional policies take full effect. The era of frictionless global scrap trade is rapidly giving way to a localized, highly regulated environment. For remelters and traders, navigating this landscape will require extreme supply chain agility and a hyper-focus on material compliance. As European supply risks being politically landlocked, U.S. raw material imports become suddenly more expensive, and Southeast Asian quality barriers rise, we expect to see continued volatility in regional premiums and a widening decoupling of traditional scrap-to-LME pricing mechanisms in certain regions. Adapting to this fragmented reality will be the defining challenge for the industry in the months to come.

After the Indonesia Critical Minerals Conference & Expo 2025​​​​​​​, Wu Chenyu, SMM's Nickel Industry Marketing Director, and Enzo, a nickel industry analyst, led a team of international visitors to visit the Indonesia Branch of Guangdong Brunp Recycling Technology Co., Ltd.

On June 10, the Ministry of Ecology and Environment of the People's Republic of China publicly issued the "Public Notice on Regulating Matters Related to Imported Recycled Black Mass Raw Materials from Lithium-ion Batteries and Recycled Steel Cases," with the document index number 000014672/2025-00219. The notice disclosed the HS code for recycled black mass raw materials from lithium-ion batteries as 3824999996, and the announcement will be implemented from August 1, 2025.

1 day until the conference Conference Name: 2025 SMM 2nd Global Recycled Metals Industry Summit Forum Conference Time: June 12-13, 2025 Conference Venue: Hyatt Regency Bangkok Suvarnabhumi, Bangkok, Thailand Industry leaders such as Japan's Koji Industry, SVOLT Energy Technology, Thailand's Ministry of Industry, MNMA, Material Recycling Association of India (MRAI), JCC International, Hunan Rich New Environmental Technology Co., Ltd., and Yixin International have gathered to jointly explore new trends, technologies, and policies in the development of the recycled metals industry! Currently, the recycling of renewable resources faces challenges such as low recycling and utilization rates, low levels of industrial organization and standardization, low overall technological capabilities, and a lack of comprehensive industry development plans and policy guidance. Especially in the current context of increasingly scarce resources and the intensifying global climate crisis, the innovation of recycling and sorting technologies for secondary copper and aluminum scrap yards is of undeniable and growing urgency. This is primarily reflected in multiple critical aspects, including resource security, environmental protection, economic benefits, industrial upgrading, and addressing international competition. Meanwhile, against the backdrop of global economic integration, green barriers in international trade are on the rise. Many countries and regions are imposing increasingly stringent environmental requirements on imported products and setting clear standards and norms for the recycling and utilization of renewable resources. For instance, the Carbon Border Adjustment Mechanism (CBAM) implemented by the European Union imposes additional carbon tariffs on high-carbon-emission products, which will have a certain impact on the exports of traditional high-energy-consuming products such as copper and aluminum. So, how can we break through in recycling and sorting technologies to promote the sustainable development of the recycled metals industry and even the entire renewable resource recycling sector? In this regard, during the 2025 SMM 2nd Global Recycled Metals Industry Summit Forum to be held by SMM in Thailand from June 12-13, 2025 , Zhou Bo, Executive Vice President of SMM Information & Technology Co., Ltd. , will serve as the moderator, and Liang Jiali, Deputy General Manager of Foshan Lvtian Environmental Protection Machinery Equipment Co., Ltd., Li Zhiqiang, General Manager of Henan Recycling Technology Co., Ltd., Ye Hangyu, Director of the Foreign Trade Department of Hefei Anjinglong Electronics Co., Ltd., and Sun Bolin, Sales Director of Liaoning Pinuo Environmental Protection Technology Co., Ltd. will participate as guest speakers in a roundtable discussion on the topic of "Secondary Copper and Aluminum Scrap Yards: Innovating Recycling and Sorting Technologies to Pave the Way for Green Carbon Reduction in the Industry" Moderator & Guest Speakers Confirmed Guest Speakers Conference Agenda June 12: Main Agenda 01 9:00 AM - 12:00 PM Company Visit ERIGHT METALS CO., LTD. 02 10:00-12:00 Registration 03 10:00-12:00 Free Networking 04 12:00-13:00 Buffet Lunch 05 13:30-13:45 Opening Remarks Guest Speaker: Fan Xin, Chairman of SMM Information & Technology Co., Ltd. Li Shilong, President of China Renewable Resources Industry Technology Innovation Alliance 06 13:45-14:00 Green Transformation and Sustainable Development Prospects of Thailand's Recycled Metal Industry Guest Speaker: Dr. Somthai Wongcharoen Secretary General, ASEAN Institution of Recycling (AIR) 07 14:00-14:20 Strengthening International Exchanges to Promote New Green Development of China's Non-Ferrous Recycled Metals Guest Speaker: Li Shilong, President of China Renewable Resources Industry Technology Innovation Alliance 08 14:20-15:10 Roundtable Forum: Interviews with Top Entrepreneurs in the Recycled Metal Industry 1. Future Trends in Recycled Raw Material Supply Based on the Development of Thailand's Industry Chain 2. Investment Risks in Southeast Asia's Recycled Metal Industry 3. International Trade Flows and Consumption Trends in the Recycled Metal Industry Under Geopolitical Influences Moderator: Li Shilong, President of China Renewable Resources Industry Technology Innovation Alliance Guest Speakers: Zhou Xiangchun, General Manager of Da Zheng Da Ji Metal (Thailand) Co., Ltd. Qin Xinghong, Chairman of P.C. WOOD PRODUCTS CO., LTD. Zhang Junbing, Global Sourcing Director of Hailiang Group Co., Ltd. Liu Qingcheng, Deputy General Manager and Director of Thai-China Nonferrous Metals International Co., Ltd. 09 15:10-15:25 Tea Break 10 15:25-15:40 The Path to Global Recycled Metal Industry Development Driven by the ESG Background Guest Speaker: Xie Xiaoying, Director of Sustainability Business, Shanghai Lvran Environmental Information Technology Co., Ltd. 11 15:40-16:00 Changes in the Global Supply-Demand Pattern of the Recycled Metal Industry Guest Speaker: Cui Suoye, Director of Non-Ferrous Consulting, SMM Information & Technology Co., Ltd. 12 16:00-16:20 Global Recycled Metal Industry Development Trends and Challenges from a Middle Eastern Perspective Guest Speaker: Sanjeev Phadke, Treasurer and Executive Committee Member of the Middle East Recycling Bureau 13 16:20-17:10 Roundtable Forum: Exploring the Global Recycled Metal Market: In-Depth Analysis of Strengths and Challenges in India, the Middle East, Europe, and Southeast Asia Moderator: Fan Xin, Chairman of SMM Information & Technology Co., Ltd. Guest Speaker: Kittipot Thanalertlap, Metalcom Ltd. General Manager Sanjeev Phadke, Head of Recycling Division, Middle East, and Member of the Executive Committee WENCESLAO MANZ, Director, DIMEXA HOLDINGS PTE. LTD. Tan Tian, Doctor Scrap (Doctor of Recycling), General Manager 14 18:30-20:00 Award Ceremony Dinner - Awards for High-Quality Material Yards, Trustworthy Traders, and Outstanding Equipment Enterprises June 13, Sub-forum ·Battery Forum· 01 09:00-09:25 Strategic Layout of Thailand's Battery Recycling Industry: A Blueprint for the Development of the EV Industry in the Next Five Years Guest Speaker: Dusit, Advisor to the Chairman, Ministry of Industry, Thailand 02 09:25-10:15 Roundtable Discussion: Southeast Asia's Battery Resource Market: Supply Chain Dynamics Moderator: Cui Suoye, Director of Non-Ferrous Consulting, SMM Information & Technology Co., Ltd. Guest Speakers: Chen Wenkai, Chairman, Malaysia Non-Ferrous Metals Association Sujin Kim, Global Business Development Director, BatX Energies Zhao Bin, President, Thai-Chinese Rayong Industrial Zone Wu Xiaoyun, Chairman, Beijing-Tianjin-Hebei Lead-Acid Battery Industry Alliance; Shen Juan, Purchasing Director, Jingjiu Group 03 10:15-10:40 Current Status and Path to Transformation of Southeast Asia's Waste Lead-Acid Battery Market Guest Speaker: Wu Xiaoyun, Chairman, Beijing-Tianjin-Hebei Lead-Acid Battery Industry Alliance 04 10:40-11:00 Tea Break 05 12:00-13:00 Improving the Battery Recycling System Driven by the Market Growth of EVs in Southeast Asia Guest Speaker: Luo Tieying, President, Jinchi Industrial Park 06 11:25-11:50 Exploring Africa: Sustainable Expansion and Opportunities for Raw Material Investment Guest Speaker: Yousef Al Sharif, Manager, Sharif Metals Group 07 12:00-13:30 Buffet Lunch ·Copper and Aluminum Forum· 01 14:00-14:20 New Dynamics in Global Supply and Demand for Recycled Copper and Aluminum from a North American Perspective Guest Speaker: Robin Wiener, President, Recycled Materials Association 02 14:20-14:40 SMM Serves the Global Recycled Copper and Aluminum Metal Market Guest Speaker: Zhang Xiaoyao, Project Leader of Recycling Conference, SMM Information & Technology Co., Ltd. 03 14:40-15:00 Global Supply-Demand Pattern of Recycled Metals from an Indian Perspective Guest Speaker: Amar Singh, Secretary General, India Recycling Bureau 04 15:00-15:20 Building a New Metal Hub in Cambodia-China: Inviting You to Co-Establish an Overseas Demonstration Industrial Park for Recycled Non-Ferrous Metal Processing Guest Speaker: Cao Zhuo, General Manager of International Business, Americas Region, Cambodia-China Metal Materials Industrial Park 05 15:00-15:20 Tea Break 06 15:20-16:20 Roundtable Discussion: Recycled Copper and Aluminum Yards: Innovative Recycling and Sorting Technologies Paving the Way for Green and Low-Carbon Industry Development Moderator: Zhou Bo, Executive Vice President, SMM Information & Technology Co., Ltd. Guest Speakers: Liang Jiali, Deputy General Manager, Foshan Lvtian Environmental Protection Machinery Equipment Co., Ltd. Li Zhiqiang, General Manager, Henan Recycling Technology Co., Ltd. Ye Yuhang, Director of Foreign Trade Department, Hefei Anjinglong Electronics Co., Ltd. Sun Bolin, Sales Director, Liaoning Pinuo Environmental Protection Technology Co., Ltd. List of Participating Companies

【16,000-ton Recycled Lithium Battery Mixed Powder Project Launched】 Recently, the Hengyang Municipal Government in Hunan Province published the EIA acceptance notice for the "Annual 16,000-ton Recycled Lithium Battery Mixed Powder Project" by a local company, marking a significant step in the region’s power battery recycling sector. With an investment of ¥48 million, the project is located in the Songmu Economic Development Zone, Hunan. It will establish two recycled lithium battery mixed powder production lines alongside supporting utilities and environmental facilities. Using scrap lithium battery electrode sheets as raw materials, the project employs advanced 6th-generation graded crushing and grinding technology in a fully enclosed closed-loop process to produce recycled mixed powder (cathode/anode blend), along with byproducts like copper and aluminum granules. The project will be implemented in two phases, each adding one production line. Upon completion, it will yield ~16,000 tons of mixed powder annually (~8,000 tons per phase).

【SMM Analysis】Recycling Industry Events This Week (Jun. 3-6): This week's recycling industry events.

In May 2025, SMM's total lithium carbonate production decreased by 2% MoM and increased by 15% YoY. Due to the significant decline in lithium carbonate prices in May, the monthly average price fell by over 10% MoM compared to April. Some non-integrated lithium chemical plants, unable to withstand the cost pressure, reduced or halted production. Coupled with the production reductions from some lithium chemical plants due to production line maintenance, the total lithium carbonate output in May showed a slight decline, though the overall volume remained at a high level. By raw material type, the total production of lithium carbonate derived from spodumene in May decreased by 4% MoM. Although some lithium chemical plants had reduced their output due to cost issues or production line maintenance, the stable production of integrated enterprises provided strong support for the output of lithium carbonate derived from spodumene, limiting the decline in production. The total output of lithium carbonate derived from lepidolite showed a slight increase, up 2% MoM, benefiting from the continuous ramp-up of production at leading lithium chemical plants. The rising temperatures in salt lake regions in May boosted the output of lithium carbonate, with overall production increasing by 3% MoM. The total output volume in the recycling sector decreased significantly in May, down 16% MoM. The main reason was that, amidst the sharp decline in lithium carbonate prices, the prices of scrap and black mass did not fall in tandem, leading to severe losses for recycling sector lithium chemical plants and a substantial reduction in output. Overall, the total lithium carbonate output in May decreased by 2% MoM and increased by 15% YoY.

The 2025 lithium battery recycling policies emphasize a dual logic of "regulation + incentives". By raising technical thresholds, strengthening full-lifecycle management, and increasing fiscal support, the policies aim to transition the industry from fragmented competition to high-quality development. Subsidies and relaxed import/export conditions are expected to alleviate long-term economic imbalances in the recycling sector.

According to SMM analysis, the core logic of the lithium battery recycling policy in 2025 is "regulation + incentives". By raising technical barriers, strengthening full life cycle management, and increasing financial support, the industry will be driven to shift from extensive competition to high-quality development. Meanwhile, by providing subsidies and liberalizing import and export conditions, the long-term inverted pricing phenomenon in the current recycling industry can be mitigated to a certain extent.

This week, lithium salt prices fluctuated, while nickel and cobalt salts saw minor declines. The coefficients for ternary and lithium cobalt oxide black powder continued to drop. For example, the coefficient for ternary cathode black powder currently ranges between 74-77%, and that for ternary battery black powder is 71.5-73.5%. Lithium points for lithium iron phosphate (LFP) cathode black powder stand at 2,500-2,700 yuan per lithium point, while LFP battery black powder ranges from 2,200-2,400 yuan per lithium point. Suppliers and traders remain firm on pricing, though some crushing plants are holding back inventory due to thin profit margins, leading to weaker market transactions compared to April.