If you’re staring at a pile of soda cans in your garage or trying to budget for a massive construction project, the cost of aluminum per pound probably feels like a moving target. Honestly, it is. As of mid-January 2026, we are seeing some of the most volatile price swings in recent memory. One day you’re looking at $1.35 on the London Metal Exchange (LME), and forty-eight hours later, traders are pushing it past $1.44.
It’s a weird time for metal.
Basically, the "sticker price" you see on financial news sites almost never matches what you actually pay at a hardware store or get back at a recycling center. There’s a massive gap between global commodity trading and the "boots on the ground" reality of aluminum prices.
The Two Worlds of Aluminum Pricing
You've gotta understand that aluminum doesn't have just one price. It lives in two different universes.
First, there’s the spot price. This is the professional benchmark. If you check the LME or Kitco today, you’ll see numbers hovering around $1.43 to $1.44 per pound. This is for "primary" aluminum—99.7% pure stuff sitting in a warehouse in Rotterdam or Singapore.
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Then there’s the scrap price. This is what matters to most of us. If you take a load of old siding or lawn furniture to a local yard, you aren't getting $1.40. You’re more likely looking at **$0.50 to $0.70 per pound**, depending on how clean it is.
Why the massive gap?
Smelters are expensive to run. To turn your old gutters back into usable ingots, someone has to pay for the massive amount of electricity required to melt it down, plus the labor, the shipping, and the "middleman" cut.
What’s Driving the Cost of Aluminum Per Pound Right Now?
If you’re wondering why prices are creeping up toward three-year highs, it’s not just one thing. It's a "perfect storm" of energy crises and policy shifts.
Electricity is the gatekeeper. Smelting aluminum is basically "congealed electricity." To make one pound of the stuff, you need roughly 6 to 7 kilowatt-hours of power. In places like Iceland and Mozambique, equipment failures and power grid instability have recently knocked major smelters offline. When supply drops, the cost of aluminum per pound naturally climbs.
The "Data Center" Rivalry
This is a detail most people miss. Aluminum smelters are now competing for the same electricity contracts as AI data centers. Companies like Google and Amazon are willing to pay a premium for long-term power to keep their servers humming. Smelters, which operate on razor-thin margins, are getting priced out of the energy market.
China’s 45-Million Ton Wall
For years, China "filled the gap" whenever the world needed more metal. Those days are over. The Chinese government has set a hard capacity cap of 45 million tonnes to meet environmental goals. They are actually hitting that ceiling in 2026. Instead of exporting their surplus, they’re starting to keep it for themselves, which leaves the rest of the world scrambling.
Real-World Scrap Prices (January 2026)
If you're heading to the scrap yard this week, here is what the "street price" looks like. These aren't official LME numbers; they are what's actually being paid at scales across the country.
- Clean Aluminum Rims: These are the gold standard. Since they are high-quality alloy and easy to process, you can get around $0.80 to $0.85 per pound.
- Aluminum Siding and Gutters: Usually brings in about $0.65 to $0.70.
- Used Beverage Cans (UBC): Prices vary wildly by state, but the national average is sitting near $0.55 per pound.
- Dirty Aluminum: If your metal has steel bolts, plastic handles, or rubber attached, expect a massive "haircut." You might only see $0.10 to $0.15 because the yard has to spend time cleaning it.
The Hidden Impact of the "Midwest Premium"
If you're a business owner in the U.S., the cost of aluminum per pound includes a hidden fee called the Midwest Premium. This is essentially the cost of shipping and the impact of tariffs.
In early 2026, U.S. tariffs on certain imported aluminum have jumped significantly—some reaching 50%. This creates a "rift" where American buyers are paying way more than the global average. While the LME might say aluminum is $1.40, a manufacturer in Ohio might effectively be paying closer to **$2.00 per pound** once the premium and tariffs are tacked on.
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Misconceptions That Cost You Money
Most people think aluminum is "just aluminum." It’s not.
If you bring 6061 or 6063 grade extrusions (think window frames or high-end tubes) to a yard, they are worth more than "cast" aluminum (like an old grill or engine part). Cast aluminum often contains more silicon and impurities, which makes it less valuable for recycling into high-end products. Always separate your "extruded" pieces from your "cast" pieces. If you mix them, the yard will almost always pay you the lower rate for the whole pile.
Future Outlook: Will Prices Drop?
Honestly, the outlook for the rest of 2026 is "high and volatile."
Analysts at Bank of America and ING are predicting a global deficit. We're simply not building enough new smelters to keep up with the demand from electric vehicles (which use way more aluminum than gas cars) and solar panel frames.
However, there is a glimmer of hope for buyers. New production capacity in Indonesia is expected to come online later this year. If those plants ramp up quickly, we could see the cost of aluminum per pound stabilize or even dip back toward the $1.25 range by late autumn.
Actionable Steps for Navigating 2026 Prices
If you're dealing with aluminum right now, here is how to handle the volatility:
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- For Scrappers: Wait for the "runs." Don't just go when your bin is full. Watch the LME price; when you see a 3% or 4% jump in a single week, that’s your window. The yards usually lag behind the market by a few days, so move fast when the news is good.
- For Contractors: Quote your jobs with a "metal surcharge" or a 15-day expiration. If you quote a project today based on $1.40 aluminum and it takes you two months to start, your profit margin could be eaten alive by a price spike.
- For Manufacturers: Look into Secondary (Recycled) Ingot. With the new Carbon Border Adjustment Mechanism (CBAM) rules taking effect, recycled aluminum is becoming much more "economically friendly" than primary metal. It uses 95% less energy to produce, which insulates it slightly from the crazy electricity price spikes we're seeing.
- Sort Your Scrap: Use a magnet. If it sticks, it’s not aluminum. Removing even a few steel screws from a pile of aluminum siding can jump your payout from "dirty" prices to "clean" prices, which can literally double your money.
The market is tight, and the "cushion" of extra inventory we used to have is gone. Whether you're buying or selling, treat aluminum like the high-stakes energy commodity it has become.