Participants in the US aluminum market expect that a large amount of imported aluminum will flood in by early 2026 to fill the inventory gap. Affected by the tight spot supply, the Platts Midwestern US aluminum premium has risen to an all-time high.
This premium first surpassed the $1 per pound mark on January 23rd, with the assessed price at $1.0095 per pound. Since the beginning of the year, producers, traders and consumers have all expected the premium to soar above $1 per pound, especially due to the persistent uncertainty of tariff policies, and importers are reluctant to significantly replenish their inventories.
Data from the US domestic trade and industry associations show that by the end of 2025, both the inflow of aluminum and the orders for aluminum products declined simultaneously. The uncertainty of the US tariff policy continued to overshadow the market dynamics in early 2026, forcing most participants to maintain weak spot trading and scarce inventory levels. "Unless you are willing to take the risk of purchasing metal without order support, you are simply gambling," an aluminum ingot consumer told Platts.
According to Platts, a subsidiary of S&P Global Energy, the Midwestern premium rebounded in January, but trading volumes remained at a low level.
Market generally shows a bullish premium
The participants predict that with the new P1020 aluminum arriving in the United States soon, the premium will remain at a high level in the first quarter of 2026, and spot buyers generally accept the high-cost spot products. "I expect another full-scale apocalypse," a trader emphasized at the beginning of the first quarter, stating that supply was generally tight.
As the market fully absorbed the impact of the doubling of import tariffs implemented in the middle of the year, the premium level in the central and western regions continued to rise in the second half of 2025. The premium as assessed by Platts on December 31 was 91.05 cents per pound, an increase of 55% compared to the price level when the 50% tariff took effect on June 4.
Although the increase in premium prices makes it more feasible for global suppliers to sell to the United States from the end of 2025, due to the uncertain long-term tariff outlook, conducting spot transactions with American customers is still regarded as a high-risk behavior. Data from the US International Trade Administration (ITA) aluminum import monitoring portal shows that the import volume of unprocessed non-alloy aluminum into the United States in 2025 decreased by 25% year-on-year.
ITA data shows that of the 1.54 million tons of aluminum imported by the United States in 2025, approximately 1.01 million tons (accounting for 70%) came from Canada. Apart from Canada, only India and the United Arab Emirates exported more than 100,000 tons of aluminum to the United States. S&P Global Market Intelligence data indicates that in 2024, Canada also accounted for 70% of the United States' primary aluminum imports.
Given the uncertainty in the US-Canada relationship and the persistently high European aluminum premiums at the beginning of 2026, most of Canada's available production capacity has committed to supplying the European market until the end of the first quarter. According to both the buyers and sellers, the US is waiting for the supplies from the Middle East, Asia, Australia and other regions that were purchased at the end of 2025.
As the prices at the London Metal Exchange rose, they supported the global prices of basic metals. The increase in the European aluminum premium also prompted overseas production capacity to shift.
Demand remains stable amid tariff concerns
The demand in the United States from the end of 2025 to the beginning of 2026 remained largely unchanged, and the purchasing intention was considered to be stable. According to the latest statistics from the Aluminum Association of the United States, the average order volume of domestic aluminum producers from January to November 2025 was only 0.5 percentage points lower than that of the same period in 2024.
However, the data shows that the aluminum order volume began to decline at the end of 2025. In November, the orders for flat rolled products (plates, billets, tank materials and foil) decreased by 11.4% month-on-month, and the orders for extruded products decreased by 21.9%. Compared with November 2024, the total order volume decreased by 6.1%.
Market participants stated that assessing long-term demand is challenging, especially as the outlook is contingent upon the constantly changing trade policies. Market experts speculate that aluminum tariffs may be raised or lowered, or even completely abolished.
Another variable lies in whether the policy adjustments are fully implemented. For instance, some people question whether the United States will establish a quota system with certain countries, allowing a specific quantity of aluminum products to be imported at a lower tariff rate - this rate might remain at the 25% level implemented from 2018 to mid-2025.
Many participants chose to hold their existing inventory, keep the spot business at the lowest level, and strictly manage the inventory, despite the overall storage estimate being far below 200,000 tons. Platts data shows that since November 18th, the MOC platform has not reported any transactions exceeding 300 tons.
The Platts Midwestern Premium Forward Curve has remained in a backwardation state since its launch on January 2nd.
Market participants mainly rely on contracts and existing supplier relationships to meet their immediate demands. While discounts are becoming increasingly scarce, they seek greater flexibility in terms of contract volume.
Market experts said that the negotiations for the 2026 contract started earlier and lasted longer than in previous years because the annual discounts sought by customers were no longer feasible. Many large consumers secured their supply for 2026 through long-term contracts and maximized the flexibility of these agreements. "That's why we were fortunate not to have to order at a premium this year," a consumer company told Platts.
Although market rumors at the end of 2025 indicated a desire for shorter contract terms such as quarterly or monthly, the negotiations in 2026 showed that most agreements remained unchanged.
