Trump's tariffs drive US physical market aluminium premiums to record high

By Pratima Desai

LONDON (Reuters) - Price premiums for aluminium connected the carnal marketplace successful the United States person surged to a grounds precocious owed to the looming menace of tariffs connected imports of the metallic utilized successful the transport, operation and packaging industries.

U.S. President Donald Trump is readying to reconstruct 25% tariffs connected aluminium imports from March 12. Tariffs connected astir imports from Mexico and Canada took effect connected Tuesday.

Buyers connected the carnal marketplace usually wage the London Metal Exchange benchmark aluminium terms positive a premium which typically covers taxes, transport and handling costs.

The U.S. Midwest duty-paid aluminium premium astatine supra 40 U.S. cents a lb oregon astir $900 a metric ton is up astir 60% since the commencement of 2025.

"Ultimately, the U.S. is simply a nett importer of aluminium ... Producers volition not privation to wage the tariff, they volition effort to walk connected arsenic overmuch arsenic they tin to consumers," said Bank of America expert Michael Widmer.

"This leaves you with a marketplace wherever aluminium units volition perchance beryllium diverted distant from the United States."

Widmer said the premium whitethorn person to emergence to adjacent 47 cents a lb to afloat relationship for a 25% levy.

U.S. aluminium import taxes volition use to Argentina, Australia, Canada, Mexico, European Union countries and the UK.

Canadian smelters relationship for the bulk of superior and alloyed aluminium exports to the United States, 70% of 3.92 cardinal tons past year, according to accusation supplier Trade Data Monitor.

"The US cannot nutrient each that aluminum, they don't person the capacity," said Eivind Kallevik, CEO astatine Norwegian aluminium shaper Hydro successful an interrogation aft the company's 4th fourth results.

"If the U.S. is going to support manufacturing cars and different products, they volition request to pull the metal. That means higher premiums and costs."

The 2nd largest exporter to the United States is Saudi Arabia, not included successful the database truthful far, with an 11% share, according to Trade Data Monitor.

Analysts said aluminium produced successful countries wherever import levies use is apt to beryllium diverted to Europe, wherever the duty-paid carnal marketplace premiums has dropped to 11-month lows astatine $240 a metric ton, down 35% since the commencement of 2025.

(Reporting by Pratima Desai; editing by Christina Fincher)