Canada’s aluminium exports to Europe likely to extend rise in 2019: Source says

According to a recent report, Canadian aluminium exports to Europe are expected to extend rise this year, if the Section 232 tariff is not lifted by the United States.

Since when the Trump administration levied 10 per cent tariff on aluminium and 25 per cent on steel imports in March 2018, Canada had been diverting primary aluminium P1020 shipments to Europe, where Canadian exports have duty free status.

Consequently, Canadian aluminium exports to Europe rose by more than 11-fold to 15,927 tonnes in 2018, up from 1,362 tonnes in 2017, trade data showed. Canada’s aluminium deliveries to the US last year thus accounted for 4.5 per cent of the region’s total imports of 353,279 tonnes.

The surge in exports was also partly driven by the US sanctions on Russian giant Rusal, as buyers secured aluminium from alternative sources.

Canada was given a grace period to negotiate an exemption from the US metal tariffs last year but was not successful. The country is, however, still in talks with the US government to end the tariffs.

In February, the Canadian ambassador to the US had reported that the aluminium tariff could end in weeks, but no update on that yet.

"Canada wants an unlimited quota for US exports — that is slowing things down," a trader active in the US aluminium market said.

"Lots of Canadians hope that maybe the [tariff] situation could change, so they can ship metal to the US. [But for now] they continue to sell spot to Europe," a second trader said.

Canada produces around 3.2 million tonnes of primary aluminium every year. Producers like Alcoa, Aluminerie Alouette, and Rio Tinto operate a total of 10 plants in Canada, with nine in Quebec and one in British Columbia.