U.S. tariffs on imported aluminium lift domestic prices; prices fall in the Asian market on surplus supply

U.S. tariffs on imported aluminium and steel which has triggered a trade war, has shaken the global markets, easing Asia's supply-demand balance and putting pressure on prices in this region while lifting prices in the U.S. This was further worsened by the sanctions imposed upon Rusal by the U.S., which has created a supply concern among its buyers. U.S. imports of the metal decreased 10% in the January-August period from a year earlier due to sanctions imposed by President Donald Trump causing prices to go up.

According to the U.S. Geological Survey, imports of aluminium and aluminium products excluding scraps dropped about 440,000 tons to stand at 3.85 million tons. In late October, spot prices for aluminium ingots on an ex-works basis stood at around US$2,400 per ton, up roughly 3% from a year earlier.

According to Metal Bulletin, the weekly aluminium premium (cif MJP) now stands at US$123 per tonne. In the United States, the Midwest aluminium premium remained unchanged this past week, holding at 19.25-19.75 cents per pound, where it has resided since late October.

Aluminum producers reaped the benefits due to higher prices, while downstream consumers of aluminium have raised prices of products to manage the costs. The U.S. has been trying to shift its import sources and now importing finished and half-finished products with high added-value items from countries not subject to tariffs.

In Asia, the supply-demand balance has loosened the market, pushing prices down in Japan, the largest importer of aluminium in the Asian market. Premiums for aluminium shipments to Japan in the October-December period dropped 22% from the previous quarter to a one-year low. In late October, spot prices for aluminum ingots came to around $2,050 per ton, nearly 10% lower than in the U.S. Exporters are turning to Japan, which has solid demand for aluminium from automakers and home appliance manufacturers.

Japan's imports of aluminium ingots remained unchanged, but, the sources have changed.  While imports from Russia slipped 20%, those from India and Indonesia soared more than twofold and 1.5 times, respectively. China’s export to the U.S. declined but it boosted up by exporting to other destinations.