In the days following the US President's doubling of import tariffs on steel and aluminium from 25% to 50%, participants in the non-ferrous metals market expressed various concerns about fundamental changes at an industry event from June 2nd to 5th.
From June 4th (the date when the additional tariffs took effect) to June 9th, the premium for aluminium in the Midwestern United States rose by nearly 15%. Some traders and consumers said they expected demand to be undermined, although this situation would not occur until around October 2025. Other common viewpoints of market participants include: the uncertainty of long-term demand planning; Divergent views on the performance of the terminal usage department; Doubts about the expansion speed of domestic supply And the changes in global trade flows.
A consumer said that even if import tariffs were imposed, the United States would still need to purchase materials from other countries.
"This won't solve any problems," the person said when referring to tariffs, adding, "We are too dependent on imports."
As market participants are still waiting to see if the 50% tariff rate will remain unchanged, the overall macroeconomic uncertainty makes it increasingly difficult to assess demand and make purchases accordingly, market insiders said.
A producer said, "The plan for next year will be different." We will closely monitor the demand.
Uncertainty in the second half of the year
The above-mentioned consumers said that there might be demand disruption in the automotive and construction industries. At present, people's views on the performance of the industry vary: One trader mentioned that the aerospace industry performed better compared with the automotive and can industries, while the same producer mentioned above also pointed out that the electric vehicle market has slowed down.
Another manufacturer said, "We are worried that the automotive industry will slow down in the second half of 2025."
Market insiders say that fluctuations in global trade policies have prompted some changes in the flow of aluminium. Another consumer said that some ships from South America were cancelled because the increase in tariffs raised the risk of importing raw materials. Meanwhile, the first producer said that due to the strong demand in Canada, they exported very little material to the United States. Another trader said that goods from Canada were being transported to Mexico and Europe.
Although the aluminium manufacturer Emirates Global Aluminum recently announced an investment of 4 billion US dollars to build a primary aluminium smelter in Oklahoma, the United States, many consumers are skeptical about whether the facility can be realized. The third consumer said that the energy agreement has not been signed yet, so the energy demand of the facility will face fierce competition.
"I don't believe this will happen," said the third trader when talking about reaching an agreement on EGA within the next six months. The downside risk is very high.
Aluminum chain price trend
The premium for aluminium in the Midwest first touched a record high of 44.05 cents per pound on June 2nd, and then rose continuously to new highs from June 3rd to 6th. The valuation on June 6th was 68 cents per pound higher than the LME average price, delivered to the Midwest, which was the latest record high. After the premium, it dropped back to 67 cents per pound on June 9th.
The current premium level is nearly three times that at the beginning of 2025: On January 2nd, Platts estimated that the premium in the Midwest was 23.35 cents per pound.
Platts data shows that from May 30 to June 6, the premium in the Midwest rose by more than 75%. During the week from June 2nd to 6th, after the news of the tariff increase was released, the indicative prices we heard continued to rise. Some replacement cost values are theoretically as high as 76 cents per pound.
Market participants said that another factor that might weaken the demand for P1020 is that the supply of waste has loosened over the past few months as many consumers have withdrawn from the spot market. A scrap metal trader said that the changes in the trading price of the Midwestern premium have played an important role in the supply of the scrap metal market.
In early June, the lowest quote for used aluminum cans (UBCs) was 60% of the Platts US aluminum trading price, compared with 80% last month.
The European aluminum Association said on June 4 that the material used to manufacture aluminum does not need to pay the same tariffs as other aluminum products, which has raised concerns about the accelerated outflow of aluminum waste from Europe. The Aluminum Institute of America said in a statement on June 5 that imposing a 50% tariff on aluminum imports would harm the aluminum industry of the United States.
One of the countermeasures that the European Commission is currently considering after the implementation of reciprocal tariffs in the United States is the possibility of imposing export fees on aluminum waste and scrap transported to the United States.
Paul Voss, the director general of Aluminium Europe, said: "The EU needs to introduce export fees applicable to all destinations (not just the United States) to prevent the outflow of waste and ensure access to key second-hand raw materials."
