Closed-cell foams were produced from re-melted aluminum alloy scrap that contained 0.13 wt pct Mg magnesium in the as-received state and higher levels after adding 1, 2, or 5 wt pct Mg. The excess Mg gave rise to the fragmentation of long oxide filaments present in the scrap alloy into smaller filaments and improved its distribution and wetting by the Al matrix. Foaming the re-melted scrap alloy containing 1, 2, and 5 wt pct Mg excess showed stability and good expansion in comparison to the scrap alloy containing 0.13 wt pct Mg only, but the cells became non-equiaxed when the Mg concentration was high (≥2 wt pct excess) due to cell wall rupture during solidification. Compressibility and energy absorption behavior were studied for scrap alloy foams containing 1 wt pct Mg excess, which is the optimum level to obtain good expansion, stability, and uniform cell size. Foams with densities in the range of 0.2 to 0.4 g cm⁻¹ produced by holding at the foaming temperature for different times were used for the investigation. A uniform cell structure led to flatter stress plateaus, higher energy absorption efficiencies, and reduced “knockdown” in strength compared with commercial foams made by gas bubbling. The mechanical performance found is comparable to that of commercial foams made by a similar method but the expected costs are lower.