Aug 12, 2025
When the U.S. announced a 50% tariff on imported aluminum earlier this year, the market braced for a familiar chain reaction: rising domestic prices, squeezed manufacturer margins, and hurried attempts to secure alternative foreign supply.
But instead of simply seeking new import partners, U.S. industry leaders are turning their attention to a far more local—and surprisingly abundant—source of metal: the nation’s own recycling bins.
A Hidden Stockpile in Landfills
The Aluminum Association recently reported that over $1 billion worth of recyclable aluminum cans ended up in U.S. landfills in 2024. By weight, this matches the country’s entire annual primary aluminum output—a staggering statistic that reframes the conversation around domestic supply security.
This isn’t just a waste problem; it’s an untapped resource problem. With imported aluminum now significantly more expensive due to tariffs, every ton of lost scrap is a missed opportunity to lower costs and reduce reliance on volatile foreign markets.
Why Recycling is More Than “Green”
Producing aluminum from recycled material requires about 5% of the energy needed to make it from raw bauxite. This has three key implications:
Cost Reduction – Energy is one of the largest inputs in aluminum smelting. Lower energy use translates directly into lower production costs.
Carbon Advantage – A reduced carbon footprint is becoming not just an ESG talking point, but a competitive differentiator as carbon taxes and emissions disclosure rules expand.
Supply Chain Resilience – By feeding more aluminum back into domestic circulation, the U.S. insulates itself from trade disputes, shipping bottlenecks, and geopolitical shocks.
For many manufacturers, this isn’t about environmental virtue—it’s about strategic hedging against policy volatility.
A Shift in Industry Strategy
The push toward recycling isn’t theoretical—it’s already influencing corporate and municipal investment plans:
Beverage giants are working with suppliers to create closed-loop systems, where cans are collected, melted, and remade into new cans without leaving U.S. borders.
Scrap-processing capacity is expanding at smelters in the Midwest and Southeast, supported by both private capital and state-level incentives.
Municipal programs are lobbying for federal recycling tax credits, arguing that every percentage point gain in aluminum recovery reduces the country’s import bill and increases domestic manufacturing competitiveness.
If momentum continues, some analysts project that recycled aluminum could supply more than 70% of U.S. demand by 2035, up from roughly 50% today.
The Challenges in Scaling
While aluminum recycling is highly efficient, the U.S. faces structural hurdles:
Low Collection Rates – The U.S. recycles only about 45% of aluminum cans, compared to over 90% in Germany and Japan.
Contamination Issues – Mixed curbside recycling streams can significantly lower recovery yields, making it harder for smelters to process scrap cost-effectively.
Infrastructure Gaps – Upgrading collection, sorting, and processing facilities requires capital investment, often without immediate ROI unless subsidies or mandates are in place.
Without coordinated action between federal, state, and private players, the full strategic potential of aluminum recycling could remain under realized.
Tariffs as a Catalyst, Not the Cause
The U.S. aluminum industry has long wrestled with import dependence, particularly on Canada, the Middle East, and China. Even before the latest tariffs, global supply chain disruptions and energy price volatility were already prompting producers to rethink sourcing.
Tariffs have simply accelerated a conversation that was already underway—pushing recycling from a side project into the center of national metals strategy.
Pillar works with growing metal recycling facilities to help them automatically manage their commodity volatility and has achieved tremendous results. Pillar offers automated hedging programs to make sure your business is protected from the potential volatility ahead. With a few clicks, you can have an effective hedging program up and running in minutes. Reach out today for a demo so we can show you how you can take your risk management to the next level!
