Aluminium volatility raises beverage packaging risk

Beroe expects aluminium-market volatility to continue through the remainder of 2026, leaving beverage manufacturers exposed to a combination of tariffs, regional premiums, physical capacity, freight, conversion charges, and elevated metal prices.

The procurement intelligence company is advising drinks businesses against treating the current conditions as either a short-lived disruption or a permanent shortage. Its preferred approach is to secure essential volume while retaining enough contractual flexibility to respond as production capacity and regional supply conditions change.

For beverage-can buyers, that means looking beyond the headline aluminium benchmark. The amount paid for finished packaging also reflects regional premiums, tariffs, transport, carbon-related costs, and conversion by rolling mills and can manufacturers, making landed cost a more useful measure than the underlying exchange price alone.

That distinction becomes important when supply routes change. Two sources offering similar benchmark metal exposure can produce very different delivered costs once import duties, freight, local premiums, lead times, and conversion are included.

Beroe senior analyst Adithiya Iyappan said buyers should compare “total landed cost” rather than headline metal prices, while also examining the origin of metal, inventory cover, lead times, and logistics routes.

Supplier concentration adds another layer of risk. Beroe is advising manufacturers to spread exposure across can makers, rolling mills, and geographies where practical rather than depending heavily on a single import route or source of primary aluminium.

That does not make all aluminium interchangeable. Beverage-can sheet requires particular alloy, rolling, coating, and forming characteristics, while can bodies and ends must perform consistently at high filling speeds and under internal pressure. A new source therefore needs to satisfy technical and commercial qualification before it can replace an established supply stream.

Additional capacity is beginning to appear in several regions. Beroe points to production ramping in North America, further beverage-can capacity planned across China, Southeast Asia, and Australia, and preparations for smelter restarts in Europe and the United States.

Those developments can improve availability without eliminating short-term exposure. A smelter restart does not immediately produce qualified can sheet at a beverage plant, and the intervening stages of rolling, conversion, coating, transport, and customer approval still determine when additional metal becomes usable packaging.

Hedging can address only one part of the problem. Financial contracts can reduce exposure to movements in the aluminium benchmark, but they do not remove tariffs, shortages, transport disruption, or regional premiums, so a business can be financially hedged while remaining physically exposed.

Inventory requires similar discipline. Beroe is recommending modest safety stocks for critical stock-keeping units rather than broad accumulation while prices remain high. That approach places more emphasis on identifying which can sizes, specifications, or seasonal products would create the greatest production disruption if supply tightened.

SKU complexity can amplify the issue. A beverage business running numerous can sizes, printed designs, end specifications, or market-specific formats spreads demand across more packaging variants, reducing the scope to pool inventory when one specification becomes constrained.

Rationalising marginal variants can therefore become part of procurement resilience as well as a commercial decision. The fewer unique formats a plant depends upon, the easier it can be to redirect stock or qualify an alternative source during periods of tight supply.

Recycled material adds another strategic consideration. Aluminium’s ability to be repeatedly recycled gives beverage cans a strong circularity case, but high recovery rates do not guarantee unlimited local availability of packaging-grade secondary metal.

Metal Packaging Europe and European Aluminium reported a 76.3% beverage-can recycling rate across the EU, UK, Switzerland, Norway, and Iceland for 2023, with recycling tonnage increasing faster than the number of cans placed on the market. That improves the secondary-material base, although scrap collection, sorting, remelting, alloy control, and rolling capacity still determine how much material returns directly to can production.

For beverage manufacturers, procurement is consequently becoming a balance between metal exposure and factory continuity. The cheapest quoted tonne is of limited value if it arrives late, carries an unexpected tariff, or cannot be converted into the specification required by a filling line.

Capacity returning to the market should ease some pressure, but the effect will differ by region and product. Through the rest of 2026, the more practical measure of aluminium risk will remain whether the right can reaches the right filling plant at the required time — and what has been added to the cost before it gets there.