The recent surge in U.S. aluminum tariffs has created a cloud of uncertainty in the industry. Experts discuss the mixed outlook on aluminum prices, with some fears surrounding future demand. Additionally, the challenges with U.S. Midwest aluminum premiums reveal how current prices are struggling against the new tariffs. The conversation also spans the stable domestic demand despite economic fluctuations and highlights trends in international supply and demand, particularly regarding Chinese solar needs.
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insights INSIGHT
Price Paralysis Amid Tariff Surge
The 50% U.S. aluminum tariff increase created industry uncertainty and price paralysis.
Most market participants expect aluminum prices to trade sideways due to balanced corporate flow and stable demand.
insights INSIGHT
Lean Inventories Support Price Floors
U.S. aluminum consumers hold very lean inventories and minimal hedge coverage.
This supports likely continued consumer hedging and price support on future pullbacks.
insights INSIGHT
Demand Risk Varies by Sector
Demand destruction risk varies by aluminum end use sector.
Sectors like packaging are less price-sensitive, but auto parts face genuine substitution risks due to tariff-driven cost differences.
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Greg Shearer, Head of Base & Precious Metals Research
This podcast was recorded on June 13, 2025.
The surprise increase in US aluminum tariffs to 50% has led to a huge amount of uncertainty across the industry and dominated our conversations at the Harbor Aluminum Summit in Chicago last week. Most participants held a rather sideways outlook on aluminum prices with two-sided corporate flow expected to continue to keep prices in a range though, others were a bit more cautious on future demand over the balance of the year. More confounding is the reaction in US aluminum premiums. The US Midwest premium (MWP) is barely high enough to cover the boosted tariff alone and well below the 70 c/lb or higher needed to incentivize necessary imports as the market remains uncertain about whether a 50% tariff on aluminum will eventually be walked back or if key exemptions may come through. Eventually, this stasis will have to break (MWP higher) if nothing changes on the tariff front.
This communication is provided for information purposes only. Institutional clients can view the related report at
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