Experts say that tariffs have had a mixed short-term impact on the metal recycling industry, but in the long run, tariffs could boost the recycling industry domestically in the United States.
The recycling metal industry is experiencing growth both domestically and internationally, partly due to the rapid development of the construction and automotive manufacturing sectors. Currently, tariffs may be providing a boost to the industry.
From 2017 to 2021, the annual growth rate of the U.S. scrap metal recycling market was 3.7%. According to analysis by Precedence Research, the global recycling metal market is expected to grow at a rate of 6% per year between 2025 and 2034. By 2024, the global recycling metal market had reached a size of $28 billion.
Industry insiders have noted that the U.S. recycling metal industry has not been directly impacted by the new tariffs, but they have observed changes in demand for various alloys.
On February 10, President Donald Trump imposed a 25% tariff on imported aluminum and steel, which was later raised to 50% on June 3.
Michael Schmied, a commodity expert and senior financial analyst at Credit Suisse, told the Epoch Times that some U.S. companies are currently restructuring their metal procurement.
They are using imported metals in non-critical parts of their business, but are shifting towards using domestic or recycled minerals in key production processes since these alloys do not incur import tariffs. If the quality of recycled materials is similar to imported metals, buyers may not be willing to pay a higher price.
“This transition creates a fundamental demand for recycled metals that did not exist before… Companies now view domestic supply as insurance against future disruptions in the supply chain,” Schmied said.
“I noticed that the tariffs initially did raise prices, but the effects were mixed. The increased cost of imported steel prompted buyers to focus more on quality and consistency, which has led to some recyclers receiving new orders.”
Schmied further stated that the tariffs also “increased equipment costs and squeezed cash flow, so any benefits come with additional risks.”
For example, many businesses in the industry import worn parts for metal shredders from China, which now also incur import tariffs. “Overall, (Trump’s) policy opened a door but also raised the risk for everyone in the supply chain,” Schmied added.
Typically, after waste metal is sorted and purified by recycling companies, it is melted and recast into coils, ingots, or sheets based on the type of metal and its intended use. After this process, the recycled metal can be sold to manufacturers for the production of new products at a much lower cost than mining unprocessed new metals.
Jodie Brewster, Senior Vice President of Texas Metals & Recycling, told the Epoch Times that Trump’s tariffs did not pose any operational setbacks to her business.
She stated that scrap metal continually flows in, and the company always finds buyers, usually industrial manufacturers, also known as “factories.”
One trend she has observed in recent months is the increase in aluminum prices, while the prices of bulk metals including steel have significantly decreased. “Today, aluminum is about $1 per pound per truckload. A year ago, it was only 91 cents per pound,” Brewster said. “I have some active buyers wanting aluminum; sometimes the quantities they want even exceed what we can provide.”
Dmitriy Cheban, a partner at All Metal Recycling in Tennessee, has also witnessed a similar trend in aluminum prices. “All types of aluminum are in demand. You can make a variety of things with it.”
Cheban told the Epoch Times that aluminum is the most profitable scrap metal his company recycles due to its wide range of applications, from cans to car parts, furniture, and even medical equipment.
He can sell aluminum for prices ranging from 50 to 90 cents per pound.
In comparison, the price of steel is only about 7 cents per pound. “The prices of other metals like steel are declining due to market uncertainties,” Cheban explained.
Brewster noted that she has also experienced the decline in steel prices, with the overall demand for metals at Texas steel mills decreasing. The steel she currently sells is “shredder feed.”
Shredders are used to reduce the size of various materials for easier transport, storage, and classification. Metals purchased as “shredder feed” improve the separation of materials early on, making the final products more readily reusable and laying the foundation for the development of new products.
Brewster stated that iron is a primary component of steel and one of the metals facing decreased demand. She mentioned that iron prices have dropped by “$50 to $60 per ton” from their historical peak in 2024.
Recycled metals are typically divided into two categories: ferrous and non-ferrous metals. The distinction lies in the presence of iron, classifying alloys as ferrous metals.
“Large companies (factories) have a hard time selling their materials,” Cheban mentioned. He noted the difficulty faced by some large manufacturers who are “stockpiling” large amounts of ferrous metals, including steel.
Stockpiling metals may be seen as a precautionary measure to prevent supply chain vulnerabilities and bottlenecks. “I’m talking about hundreds of tons,” Cheban added.
However, experts predict an optimistic long-term outlook.
In June of this year, McKinsey & Company released a report forecasting that in the next five to ten years, demand for low-carbon “circular metals,” including recycled waste, may outstrip supply.
“Circular metals” refer to a shift from the traditional business model of “make, buy, dispose” towards maximizing waste reduction and reusing existing items.
Financial analyst Schmied explains that this growth trajectory is realistic, partly because the operational approach of scrap metal merchants has changed. “Recyclers are no longer just chasing volume. They focus on accurately understanding manufacturers’ material needs at specific times. This precision targeting positions them closer to becoming custom material suppliers,” he said.
“Once you’re on this path, your growth is no longer determined solely by how much metal you transport, but by the key role you play in the production process. This helps increase profit margins and enhance investor interest.”
During his first term, Trump imposed tariffs on steel and aluminum under Section 232 of the 1962 Trade Expansion Act, which authorizes the president to adjust imports for national security reasons. The Biden administration retained some of Trump’s tariffs but lifted tariffs on steel and aluminum imports from the European Union.
According to data from the Observatory of Economic Complexity (OEC), in 2024, U.S. companies imported $1.31 billion worth of scrap aluminum, mainly from Canada and Mexico, based on public customs records. During the same period, imports of the main component of steel – scrap iron – reached $1.91 billion.
The United States is also a major exporter of scrap metals. In 2024, U.S. scrap aluminum exports amounted to $3.98 billion, mainly to India, Thailand, Malaysia, and South Korea. In the same year, scrap iron exports reached $6.46 billion.
Brewster mentioned that if other countries impose retaliatory tariffs, U.S. metal exports could decline.
For example, in May of this year, the European Union proposed retaliatory measures on U.S. imports worth $107.2 billion if a trade agreement cannot be reached.
In April, China prepared to impose a 34% tariff on U.S. scrap copper and a 25% tariff on scrap aluminum. Subsequently, in May, the U.S. and China agreed to suspend tit-for-tat tariffs for 90 days, significantly reducing some tariffs. The suspension is set to expire on August 15.
If retaliatory tariffs occur, “the United States cannot consume all of our recycled metals. So, when we reduce exports, we will have far more materials than we need. These extra inventories may lead to a drop in domestic alloy prices,” Brewster said. Any decline in U.S. scrap metal exports could also potentially slow down a burgeoning domestic industry, in addition to causing price decreases.
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