As voices from aluminium associations across US trade-allied nations grow louder, one consensus is becoming clear that the United States’ decision to increase tariffs on aluminium imports to 50 per cent is unlikely to benefit its global partners. Now, whether this bold move by Donald Trump will favour his own domestic market or not is the pressing question that continues to divide the aluminium industry. The United States relies heavily on overseas suppliers for primary aluminium, downstream products, as well as scrap. Imposing such a steep tariff across these categories raises concerns over potential supply disruptions within the country, yet some US-based producers are betting on gains.
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Century Aluminum, a primary aluminium producer, sees the tariff as an opportunity, believing that supply tightness will push prices higher, strengthening its bottom line. Indeed, the market appears to be aligning with this estimation. As of June 11, LME aluminium was trading at USD 2,511.50 per tonne, while the Midwest premium reached a record USD 1,194 per tonne surging by 190 per cent since Donald Trump’s re-election in November 2024. Since the start of June, the premium alone has jumped 42.5 per cent from USD 838 per tonne.
Consultancy Harbor Aluminum also warned that premium might reach USD 1,543 a tonne to fully reflect the 50 per cent tariff, cautioning that such levels may suppress demand. Echoing this concern, S&P Global reported growing unease among traders and consumers about possible demand destruction, though likely not before October 2025. If demand falters, even primary producers like Century Aluminum may struggle to capitalise on the tariff hike.
Also read: 190% surge in US premium - how are the US market and consumers reacting to it?
Matalco Inc., a renowned aluminium billet and slab producer in North America, with six facilities in the United States, also believes this tariff hike to be beneficial for them. But Matalco is known for producing high-quality recycled aluminium products, where aluminium scrap is a key feedstock. Now, there’s a catch. The Trump administration has waived off tariffs for aluminium scrap imports. Why? Because it is a crucial raw material for manufacturing aluminium products, given that the United States has shifted its focus to sustainability and circular economy. Initially, when the United States had imposed 25 per cent tariff on aluminium effective from March 9 offered exemptions on scrap. Since then, the United States has been witnessing a staggering rise in scrap imports. According to the International Trade Administration, the United States imported nearly 273,000 tonnes of aluminium scrap from January to April 2025, compared to 208,000 tonnes during the same period of the previous year, reflecting a year-on-year hike of 31.3 per cent.
Going forward, with an exemption of 50 per cent tariff, the United States’ aluminium scrap imports would accelerate. The rising influx of cheaper scrap into the US market would definitely create an uneven playing field for domestic producers. Moreover, the easy availability of scrap may keep the price subdued, possibly causing no fiscal benefit to companies like Matalco.
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