Trump's tariffs drive us for the physical market for aluminum premiums to absorb high

The price premiums for aluminum on the physical market in the United States have increased to a record high due to the impending danger of tariffs for imports of the metal used in the transport, construction and packaging industry.

US President Donald Trump plans to restore 25% tariffs for aluminum imports from March 12th. The tariffs for most imports from Mexico and Canada came into force on Tuesday.

Buyers on the physical market usually pay the London Metal Exchange Benchmark aluminum price plus a premium that usually covers transport and handling costs.

The US aluminum bonus from the middle west in the midwest of over 40 US cents per pound or almost $ 900 per metric has risen by almost 60% since the beginning of 2025.

“Ultimately, the United States is a net importer of aluminum … The manufacturers will not want to pay the tariff, they will try to pass on as much as possible to consumers,” said the Bank of America, Michael Widmer.

“This leaves you with a market on which aluminum units may be derived from the United States.”

Widmer said that the premium may have to rise to almost 47 cents per LB in order to completely calculate a delivery of 25%.

US -Aluminum import taxes apply to Argentina, Australia, Canada, Mexico, countries of the European Union and Great Britain.

Canadian melting huts make up most of the primary and alloyed aluminum exports to the United States, 70% of 3.92 million tons last year, according to the merchant data monitor of the information provider.

“The United States cannot produce all of the aluminum, they don't have the capacity,” said Eivind Kallevik, CEO of the Norwegian aluminum producer Hydro in an interview after the results of the fourth quarter of the company.

“If the United States continues to produce cars and other products, you need to attract the metal. This means higher premiums and costs. “

The second largest exporter in the USA is Saudi Arabia, which, according to the merchant data monitor, has not yet been recorded in the list.

Analysts said that aluminum that were produced in countries in which the import levies apply should be redirected to Europe, where the potential physical market premiums have dropped at $ 240 per ton at 11-month low levels, which has dropped by 35% since the beginning of 2025.

(Reporting of Pratima Desai; Editor of Christina Fincher)