2026 is off to a dynamic start! It has only been 4 months since my 2026 predictions, and it proves I’m a lousy fortune teller.
The big news is the aluminum market. Secondary aluminum prices are up nearly 50% since the beginning of the year. Demand for aluminum has been steady, the price increase is mostly driven by supply. The aluminum tariffs which started just over a year ago have started to impact the scrap supply. Buyers mitigated tariffs by reducing purchases and using alternate materials which resulted in less aluminum scrap in the system. The harsh mid-west winter slowed auto shredding which is a primary driver of aluminum scrap. Additionally, our secondary aluminum suppliers experienced furnace downtime, both planned and unplanned, which decreased supply even further. Demand from overseas for aluminum scrap has been strong as well.
And all this was before the Iran conflict. The Middle East and the Strait of Hormuz is critical for supply and transportation of primary aluminum. Several primary aluminum plants are offline and may take a year to repair. This will trickle through to the secondary market. I wouldn’t expect aluminum prices to drop soon, especially for specialty alloys.
More Tariffs news. While the reciprocal tariffs were ruled illegal, the Section 232 duties on aluminum and steel were strengthened. This news seemed to fly under the radar as the Iran conflict was escalating, but it has a major impact on US manufacturers. Previously, these duties were only applied to the material value. As of April 6th, they now apply to the full customs value. This action also creates categories to tariffs rates. As always, it is very complicated and requires research to determine how exactly it impacts your business.
Ironically, Die Cast Dies seem to be excluded from tariffs. This is good news if you purchase offshore tooling. Bad news for our domestic tool shops struggling to survive and compete with cheap Asian dies. This is a problem. Strong domestic Tool & die is the backbone of US Manufacturing and crucial for national security.
Save our tool shops! Buy domestic dies!
Pace Industries closed several plants which released a significant amount of business to the market. General Die Casters and Dart Casting were able to support existing customers to smoothly transition and launch programs without interrupting orders. Launching and approving a new products under tight deadlines is always challenging, but very rewarding when we succeed and support our customers in a tough spot.
GDC & Dart invested in a Keyence 3D scanner. One of the primary bottlenecks of take over work isn’t casting the part, it’s the Production Part Approval Process (PPAP), which requires time consuming layouts and capability studies. Our investment in the 3D scanner allowed to quickly verify the dimensions of our castings to launch production quickly and avoid line down situations for our customers. Our ability to handle take over business was always one our core competencies, but now it’s even better.
As always, we never know what the future will bring, but the GD Casting Group is ready for it!
Brian Lennon
CEO
GD Casting Group
