Rio Tinto sees aluminium exports to US efforts to recover pre-tariff volumes

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The impact of US trade measures on the global aluminium market continues to evolve, but for Rio Tinto, exports to the United States have largely returned to pre-tariff levels.

According to Jérôme Pécresse, head of Rio Tinto’s aluminium operations, shipments from Canada to the US have recovered significantly after an initial adjustment period following the introduction of steep import duties. The company had previously redirected substantial volumes of Canadian aluminium to Europe when Washington imposed tariffs on imported metal.

At the peak of the disruption, the share of Rio Tinto’s North American aluminium shipped to the US dropped to the mid-60 per cent range. That figure has now recovered to around 80 per cent, closely matching historical trading patterns. Pécresse said the company has gradually returned to its previous commercial structure, with the US once again serving as the primary destination for aluminium produced in Canada.

Canada remains a key supplier to the US market, accounting for about 44 per cent of American aluminium imports last year. The tariff regime, along with limited regional supply, has pushed the aluminium prices higher across the US. It has highly benefited major producers, including Rio Tinto and Alcoa, through stronger margins.

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Geopolitical tensions have added further pressure to global supply chains. The conflict involving Iran has disrupted aluminium production and logistics in parts of the Gulf region, with some smelters reducing or suspending output due to infrastructure damage and challenges moving materials through the Strait of Hormuz.

Pécresse estimated that around 2.5 million tonnes of aluminium smelting capacity in the Middle East is currently offline. These disruptions have marginally increased demand for metal from alternative suppliers, including producers in Canada, Australia and New Zealand, particularly among European buyers seeking a reliable supply.

The situation has reinforced Canada’s strategic importance as a nearby source of lower-carbon aluminium for the US. Market indicators reflect the supply pressure. The US Midwest premium, the additional cost paid above benchmark prices for aluminium delivered into the region, has nearly tripled since June last year.

Despite higher prices, US demand has remained resilient. However, Rio Tinto sees little economic justification for building a new primary aluminium smelter in the United States. One of the biggest challenges is the rising cost of electricity, driven partly by the rapid expansion of power-intensive data centres.

According to Pécresse, data centre operators can afford electricity prices two to three times higher than those required for a competitive aluminium smelting operation. In contrast, Quebec’s low-cost hydroelectric power continues to provide a significant advantage for aluminium production.

While Rio Tinto has no plans to build new US smelting facilities, other companies are moving ahead. Emirates Global Aluminium recently reaffirmed plans for the first new aluminium smelter in the US since 1980, with Century Aluminum joining the project as a partner. Construction of the proposed Oklahoma facility is expected to begin before year-end.

Rio Tinto’s investment focus remains firmly on Canada. The company recently began operations at the expanded AP60 smelter complex in Quebec’s Saguenay-Lac-Saint-Jean region. The USD 1.5 billion project will offset production losses from older potline closures and strengthen one of North America’s most significant aluminium production hubs.