European Aluminium premium hits $574/t as potential US tariff cut raises Canadian supply fears

European aluminium premiums have climbed to their highest level in almost four months as the market weighs the potential impact of lower US tariffs on Canadian aluminium supplies.

The front-month COMEX European duty-paid aluminium premium rose 10 per cent to USD 574 per tonne on October 1, Thursday, according to LSEG data. The premium, which is paid on top of the London Metal Exchange (LME) aluminium price for physical metal, reached its highest level since June 8.

Canadian metal flows drive European supply concerns

The European premium has risen in recent weeks amid reports that the US could reduce its 50 per cent tariff on Canadian aluminium imports to 25 per cent. A lower tariff could make the US market more attractive to Canadian producers, potentially reducing the metal available to European buyers.

Talks between Washington and Ottawa collapsed in mid-August, although US President Donald Trump said that he expects a trade deal with Canada to be reached.

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The United States remained Canada’s largest aluminium supplier during the first five months of 2026, with exports of 110,166 tonnes, although volumes were down from the previous year. 

The potential shift comes as Europe has increased its reliance on Canadian aluminium. EU imports from Canada rose 80 per cent year over year to 269,839 tonnes during January-July, as the bloc sought to offset supply shortfalls from the Middle East amid the ongoing tensions in the region.

The contrasting trade flows highlight Europe’s growing reliance on Canadian aluminium even as the US remains Canada’s dominant trading partner. 

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Asian premiums fall as inventories build

The divergence between European and Asian aluminium premiums has widened. The COMEX Japan aluminium premium fell 35 per cent from the end of July to USD 226 per tonne this week, its lowest level since mid-March.

“Asian aluminium premiums are retreating as inventories build and underlying demand remains weak,” consultancy CRU said in a recent note.

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CRU added that new aluminium capacity expected in 2027 would reach Asia first and could put further pressure on regional premiums.

Meanwhile, three-month aluminium on the LME fell for a fifth consecutive day on October 1, touching USD 3,105 per tonne, its lowest level since July 7.