US Midwest Aluminum Premiums Drop as Trump Lowers Canadian Tariffs

The Trump administration indicated it would lower tariffs on certain Canadian aluminum exports, triggering a sharp decline in the US Midwest aluminum premium. Under a tentative trade deal, tariffs on some Canadian products could decrease from 50% to 25%.

The September premium fell 8.2% to 95 cents a pound, while contracts for October and November dropped by more than 12%. These premiums had previously reached record highs following the implementation of 50% punitive tariffs in June of the previous year and supply shocks caused by the Iran War.

Analysts from Morgan Stanley noted that Canada had redirected metal flows to Europe after the initial US tariffs were introduced. The current shift is expected to encourage Canada to redirect those flows back to the United States, although analysts suggest Canada cannot meet the total US demand.