Due to the impact of high import tariffs and tight global supply, the premium of aluminum prices in the US spot market has reached a record high.
In early June, US President Trump doubled the import tariff on aluminum to 50%, aiming to support investment in US aluminum production.
Buyers in the US spot market usually pay the benchmark price of the London Metal Exchange plus a premium to cover costs such as freight and taxes. Since June, the post-tax aluminium premium in the Midwestern United States has soared, hitting a record high of 88.10 cents per pound (or $1,942 per ton) last Friday. Adding the aluminum price of $2,850 per ton, buyers in the US spot market need to pay $4,792 per ton.
At a price of $2,850 per ton, the import tariff on aluminum in the United States is $1,425 per ton, which is higher than about $560 per ton at the beginning of the year.
Harbor Aluminum, a consulting firm, said the price surge was also attributed to the decline in U.S. aluminum inventories and the strong market belief that tariffs would be permanent and that Canada would not receive any exemptions after Trump halted trade talks with Canada in October. Data from Trade Data Monitor shows that the United States imported more than 2.7 million tons of aluminium from Canada last year, accounting for 70% of its total imports.
Dimitri Salas of PerenniAL, an American aluminum trading company, said that Trump basically indicated that no agreement would be reached before the end of his term. Therefore, even those who were optimistic about reaching an agreement have now abandoned their previous positions.
American consumers also face fierce competition in purchasing aluminium materials, partly due to China's production cap of 45 million tons.
Analyst Tom Price predicts that there will be a shortage of 1.8 million tons in the aluminum market this year. Over the past two or three years, China's net export volume of refined aluminum and semi-finished aluminum products has decreased by 900,000 tons annually and has now dropped to 1.9 million tons per year. During the same period, aluminium output outside China decreased by 1.1 million tons annually. The combined supply of the two has decreased by 2 million tons.
