**A Scrap Life Podcast**

*Welcome to “A Scrap Life,” a podcast solely focused on the hustlers, grinders, operators, and business owners who live and breathe the scrap metal industry every day.*

**Host:** Brett Ehart
**Guest:** Michael Anderson from Shupon

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**Brett Ehart:**
All right, the trade is back. This time we’re talking aluminum with Michael Anderson from Shupon. We got some good feedback last month. People are trying to understand the Midwest premium and how tariffs are affecting the markets. Aluminum hasn’t had drastic swings like copper or silver, but it’s still been an interesting month.

Last time, we did this about three weeks ago, things have changed, not vastly but noticeably. We aim to update everyone monthly on the aluminum market. Thanks for taking the time, Mike.

**Michael Anderson:**
My pleasure. You mentioned the swings seen in copper; it tends to influence other metals. Aluminum has been trailing copper but has recently been more influenced by the strength of the dollar. Since our last podcast, we saw a 20-cent upswing mostly due to LME and the premium, but it has since settled back.

We started the year at 2900 LME, got up to 3300, and now we’re at 3050. I see us remaining range-bound between 2900 and 3200 for a while. I don’t foresee massive swings in aluminum pricing. What you might see is more movement in the discounts and percentages based on supply and demand.

**Brett Ehart:**
Have you ever seen aluminum prices, including premiums, higher than today or within the last month when it hit 3300?

**Michael Anderson:**
No, we’re in uncharted territory. Anytime you’re selling any aluminum grade over $2, it feels significant. I remember selling aluminum sheet for 25 to 30 cents a pound not that long ago, but today aluminum sheet should be in the 98 cents to a dollar range, which is pretty good.

Overall terminal numbers are great, but historically, some things don’t add up, like trading at 90% now being 60%. The spread and pricing discrepancies are noticeable.

**Brett Ehart:**
Exactly, and a 60% is a significant spread. Still, when talking about $2 and change, 60% is a big number. It’s fascinating to see which grades hold up since Trump’s tariff increase in June of last year from 25% to 50%; the Midwest transaction soared just under $150 to just under $250 now.

**Michael Anderson:**
That spread widening occurs as metal prices increase, mostly due to melt losses, making it natural to see the percentage widening on Midwest transactions. Some grades like 5052 and UBC have widened notably, with UBC going from 70% of Midwest transaction last year in May to just under 50% now. Supply factors, like increased international scrap imports, heavily influence this.

**Brett Ehart:**
UBC grades are primarily going back into can manufacturing, and there should be strength in that market, shouldn’t there? But what’s causing these shifts?

**Michael Anderson:**
It’s about supply and demand, with supply side picking up exponentially due to tariffs and premiums. Aluminum pricing in the US is higher compared to other regions, which encourages scrap imports from Europe, Mexico, and Central America with better earnings than in local markets.

**Brett Ehart:**
It makes sense. The demand for can sheet persists, yet more scrap is coming in due to transportation efficiencies in the market. Let’s talk about how industries have adapted with product like Twitch from auto shredders.

**Michael Anderson:**
Shupon deals with materials like Zorba, Twitch among others, within the international trading division. These products typically go into the secondary aluminum market, relevant for cast houses. The value-driven separation technology, as we discussed, becomes more prevalent, maximizing commodity value.

**Brett Ehart:**
Right. Value truly drives technology. The technology breakthroughs you mentioned previously have changed the way shredders now operate, shifting from waste to optimizing valuable aluminum fractions.

**Michael Anderson:**
Indeed. Technological evolution in separating aluminum fractions into specific alloys continues to develop. It drives investments, especially with raw aluminum prices like today.

**Brett Ehart:**
You mentioned some key points about import tariffs and reciprocal agreements. What should we watch related to these economic factors?

**Michael Anderson:**
The reciprocal tariff rulings, their legality questions being considered by the Supreme Court, can massively impact the market. If these are struck down, it eliminates another barrier for importing scrap, potentially widening scrap spreads further with more material entering the US.

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For further inquiries or aluminum pricing, feel free to contact Michael Anderson. We’ll reconvene next month to continue exploring and understanding the aluminum trading intricacies and market influences. Appreciate your insights today, Michael. Have a great weekend!