Analysts from Morgan Stanley stated that US President Trump's decision to double aluminium import tariffs to 50 per cent could drive up aluminium prices and the costs for its users. Analysts noted that using a premium benchmark of 20 cents per pound for consumers purchasing aluminium in the US physical market, raising tariffs to 50 per cent would ‘imply further aluminium price increases in the future to maintain metal inflows’ into the US.
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On June 2, the Midwest duty-paid aluminium premium in the US reached USD 0.58 per pound, or USD 1,279 per tonne, surging 54 per cent from May 30, when Trump announced his plan to raise aluminium and steel tariffs starting June 4.
Goldman Sachs analysts stated that the premium must rise to between USD 0.68 and USD 0.70 per pound to fully reflect the impact of the tariff increase.
In a report to clients, Morgan Stanley wrote that Trump's tariffs could also affect spot aluminium purchases in the US, as consumers may wait to see if there will be a reversal or exemptions to the policy. The US imports a significant amount of aluminium.
They added that if surplus metal is diverted to other regions, premiums there could also be suppressed. The US government initially imposed a 25 per cent tariff on aluminium, leading some producers to divert aluminium to Europe, triggering a decline in European aluminium premiums since early 2025 and supporting the flow of aluminium scrap from the EU to the US.
Strategists stated that the market also appears to be betting that the increase in aluminium tariffs will raise the likelihood of tariffs on copper imports, which the Trump administration is currently investigating under Section 232 of the Trade Expansion Act of 1962. This could serve as a justification for imposing tariffs on specific industries aimed at promoting domestic production of goods critical to national security.
However, Morgan Stanley analysts believe that if tariffs on copper are announced, recent US copper stockpiles could mitigate their impact on prices.
Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.
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