Aluminium premium for US buyers soars after Trump doubles tariffs
LONDON (Reuters) -Premiums for consumers buying aluminium on the physical market in the United States soared on Monday after U.S. President Donald Trump said he planned to increase tariffs on imported steel and aluminium to 50% from 25%.
The U.S. is heavily reliant on aluminium imports. About half of all aluminium used in the country for transport, packaging and construction is delivered from elsewhere, with the vast majority coming from Canada. The new tariffs are due to take effect on June 4.
Buyers on the physical market usually pay the London Metal Exchange (LME) benchmark aluminium price plus a premium covering taxes, transport and handling costs.
The U.S. Midwest duty-paid aluminium premium reached $0.58 per lb, or $1,279 a metric ton, on Monday. That was a 54% jump from Friday and 164% growth since the start of 2025.
Part of Monday's growth was amplified by June 2 being the first trading day of the new month, when regional premiums often make a strong move.
Goldman Sachs said the premium would need to rise to between $0.68 and $0.70 per lb to fully reflect the 50% import tariff. LME benchmark aluminium was last up 0.4% at $2,453.5 a ton.
The higher premium could weigh on U.S. spot market purchases if consumers wait to see if there is a reversal or any exemptions, Morgan Stanley said in a note.
Aluminium production depends heavily on the competitively priced and secure power supply source. It has been forty-five years since anyone built a primary aluminium smelter in the U.S.
Emirates Global Aluminium said in May it would invest $4 billion in construction of an aluminium plant in the U.S. with first metal expected by the end of the decade.
The plant would have an annual production capacity of 600,000 metric tons. For comparison, the U.S. imported 2.7 million tons of unwrought aluminium from Canada last year, according to the Trade Data Monitor.
Steel and aluminium tariffs were among the earliest put into effect by Trump when he returned to office in January. The tariffs of 25% on most steel and aluminium imported to the U.S. went into effect in March.
The 25% tariff prompted some producers to divert aluminium to Europe, leading to a 45%-fall in the European aluminium premium since the start of 2025 and inflating an outflow of aluminium scrap from the EU to the U.S.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
4 minutes ago
- Yahoo
Trump pressures 17 pharma CEOs to cut US drug prices
By Jeff Mason and Nandita Bose WASHINGTON (Reuters) -U.S. President Donald Trump sent letters to the chief executives of 17 major pharmaceutical companies, urging immediate action to lower the cost of prescription drugs for Americans, the White House said on Thursday. Letters were sent to top executives at Eli Lilly, Sanofi, Regeneron, Merck & Co, Johnson & Johnson, and AstraZeneca, among others. Copies of the letters were posted on Trump's Truth Social account. The president is calling on the companies to extend most favored nation pricing to Medicaid, guarantee such pricing for new drugs, and return excess overseas revenue to American patients and taxpayers, without providing details. Trump has given the companies until September 29 to respond with binding commitments to those terms. "According to recent data, the prices that Americans have been paying for brand name drugs are more than three times the price other similarly developed nations pay," said White House press secretary Karoline Leavitt. She added the administration will "deploy every tool in our arsenal" to end "abusive drug pricing practices."
Yahoo
4 minutes ago
- Yahoo
Trump seeks to use Canada's recognition of Palestinian state as leverage in trade talks
WASHINGTON (AP) — Canada's announcement it will recognize a Palestinian state 'will make it very hard' for the United States to reach a trade agreement with its northern neighbor, President Donald Trump said. Trump's threat, posted early Thursday on his social media platform, is the latest way he has sought to use his trade war to coerce countries on unrelated issues. And when other allies had raised the matter of Palestinian statehood, the Republican president had been ambivalent. He said this week that he did not mind that British Prime Minister Keir Starmer was taking the position that the United Kingdom would recognize a Palestinian state in September unless Israel agreed to a ceasefire in Gaza, allowed the United Nations to bring in aid and took other steps toward long-term peace. 'We have no view on that,' he told reporters later on Air Force One. Last week, the Republican president said French President Emmanuel Macron's similar move was "not going to change anything.' But Trump, who has heckled Canada for months and suggested it should become its 51st U.S. state, is now indicating that Prime Minister Mark Carney's similar recognition would become leverage before a looming deadline that the American leader set in U.S.-Canada trade talks. 'Wow! Canada has just announced that it is backing statehood for Palestine,' Trump said in his Truth Social post. 'That will make it very hard for us to make a Trade Deal with them. Oh' Canada!!!' Trump has threatened to impose a 35% tariff on Canada if no deal is reached by Friday, when he's said he will levy tariffs against goods from dozens of countries if they don't reach agreements with the U.S. A spokesperson for Carney declined comment. White House press secretary Karoline Leavitt said later that Trump "expressed his displeasure and his disagreement with the leaders of France, the United Kingdom and Canada. He feels as though that's rewarding Hamas at a time where Hamas is the true impediment to a ceasefire and to the release of all of the hostages." Some imports from Canada are still protected by the 2020 United States-Mexico-Canada Agreement, which is up for renegotiation next year. Carney's announcement Wednesday comes amid a broader global shift against Israel's policies in Gaza. Though Trump this week said he was 'not going to take a position' on recognizing a Palestinian state, he later said that such a move would be rewarding Hamas, whose surprise Oct. 7, 2023, attack on Israel prompted a declaration of war and a massive military retaliation from Israeli Prime Minister Benjamin Netanyahu. Trump's new cudgel against Canada comes after he sought this week to impose steep tariffs on Brazil because it indicted former President Jair Bolsonaro, a Trump ally who like the U.S. president has faced criminal charges for attempting to overturn the results of his election loss. Citing a personal grievance in trade talks with Brazil and now Canada's symbolic announcement on a Palestinian state adds to the jumble of reasons Trump has pointed to for his trade war, such as stopping human trafficking, stopping the flow of fentanyl, balancing the budget and protecting U.S. manufacturing. ___ Associated Press writer Rob Gillies in Toronto contributed to this report. Michelle L. Price, The Associated Press
Yahoo
4 minutes ago
- Yahoo
Trump's Trade Blitz Shocks Markets as Dollar Stages Jaw-Dropping Comeback
The U.S. dollar just pulled off its strongest monthly performance of 2025, snapping a half-year losing streak. July saw the Bloomberg Dollar Spot Index climb 2.5%, powered by a mix of surprisingly strong economic data, a confident Federal Reserve, and new trade deals inked by President Donald Trump. GDP rose 3% in Q2, defying slowdown concerns. Fed Chair Jerome Powell signaled rates could stay higher for longer, tamping down expectations of a September cut. Traders are now assigning just a 40% probability to that move, compared to near-certainty before Powell's remarks. The greenback, down 7% for the year before this rally, is suddenly on steadier footing. Warning! GuruFocus has detected 6 Warning Signs with RBLX. Behind the surge is a broader shift in global capital flows. The S&P 500 is headed for a third straight monthly gain, pulling in money from abroad as investors chase U.S. assets. Big tech continues to deliver, with earnings momentum from firms like Tesla (NASDAQ:TSLA) underscoring America's AI advantage. Treasuries are still attracting foreign buyers, and the dollar's share of global FX reserves held steady in Q1, pushing back on fears that international investors would bail on U.S. exposure during the earlier selloff. If Friday's jobs report holds up and inflation data stays sticky, Powell may have little reason to move rates before October. Trade policy may be adding fuel to the rally. Trump's latest deals appear skewed toward U.S. interests, with the euro down nearly 3% in July and Germany's industrial leaders warning of a competitive blow. The yen and pound also slid more than 3.5%, while the Canadian dollar held up slightly better. One veteran FX strategist described the agreement as an embarrassment for Europe, reinforcing U.S. dominance in the current cycle. Options markets now reflect modest upside expectations for the dollarmarking a notable shift from May and June, when bearish sentiment was in full control. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
