Record High Aluminium Premiums in the U.S. Amid Tariff Threats

Topics Covered

• Surge in aluminium price premiums in the U.S.
• Impact of proposed tariffs on imports
• Current state of the aluminium market
• Potential shift in aluminium supply

Overview of Recent Changes

Aluminium price premiums have hit a record high in the U.S. market, largely due to the impending tariffs on aluminium imports. This metal is vital for industries such as transport, construction, and packaging.

Tariff Information

President Donald Trump plans to reinstate a 25% tariff on aluminium imports starting March 12. Tariffs on several imports from Mexico and Canada have already taken effect.

Market Pricing Details

Typically, buyers pay the benchmark aluminium price set by the London Metal Exchange, plus an additional premium to cover taxes, transport, and handling costs. Currently, the U.S. Midwest duty-paid aluminium premium has risen to over 40 U.S. cents per pound, nearly $900 per metric ton, reflecting a nearly 60% increase since the beginning of 2025.

Market Expert Insights

Bank of America analyst Michael Widmer noted that the U.S. predominantly imports aluminium. Producers may pass on tariff costs to consumers, which could lead to an increase in market prices.

Import Tax Coverage

The new U.S. aluminium import taxes will extend to countries such as Argentina, Australia, Canada, Mexico, European Union nations, and the UK. Notably:

• Canadian smelters contributed to 70% of the U.S. primary and alloyed aluminium imports in 2025.
• Saudi Arabia also plays a significant role as the second-largest exporter, holding an 11% share.

Future Outlook

As highlighted by Eivind Kallevik, CEO of Norwegian aluminium producer Hydro, the U.S. lacks sufficient production capacity. If the country aims to sustain its manufacturing capabilities, it will need to ensure access to aluminium, likely leading to higher premiums and costs.

Market Shift Predictions

Analysts predict that aluminium from countries affected by the tariffs may be rerouted to Europe, where the duty-paid physical market premiums have declined to 11-month lows of $240 per metric ton, down 35% since early 2025.