Premiums for consumers buying aluminum on the physical market in the United States soared on Monday after US President Donald Trump said he planned to increase tariffs on imported steel and aluminum to 50% from 25%.
The US is heavily reliant on aluminum imports. About half of all aluminum used in the country for transport, packaging and construction is delivered from elsewhere, with the vast majority coming from Canada. The new tariffs are due to take effect on June 4.
Buyers on the physical market usually pay the London Metal Exchange (LME) benchmark aluminum price plus a premium covering taxes, transport and handling costs.
The US Midwest duty-paid aluminum premium reached $0.58 per lb, or $1,279 a metric ton, on Monday. That was a 54% jump from Friday and 164% growth since the start of 2025.
Part of Monday’s growth was amplified by June 2 being the first trading day of the new month, when regional premiums often make a strong move.
Goldman Sachs said the premium would need to rise to between $0.68 and $0.70 per lb to fully reflect the 50% import tariff. LME benchmark aluminum was last up 0.4% at $2,453.5 a ton.
The higher premium could weigh on US spot market purchases if consumers wait to see if there is a reversal or any exemptions, Morgan Stanley said in a note.
Aluminum production depends heavily on the competitively priced and secure power supply source. It has been forty-five years since anyone built a primary aluminum smelter in the US.
Emirates Global Aluminium said in May it would invest $4 billion in construction of an aluminum plant in the US with first metal expected by the end of the decade.
The plant would have an annual production capacity of 600,000 metric tons. For comparison, the US imported 2.7 million tons of unwrought aluminum from Canada last year, according to the Trade Data Monitor.
Steel and aluminum tariffs were among the earliest put into effect by Trump when he returned to office in January. The tariffs of 25% on most steel and aluminum imported to the US went into effect in March.
The 25% tariff prompted some producers to divert aluminum to Europe, leading to a 45% fall in the European aluminum premium since the start of 2025 and inflating an outflow of aluminum scrap from the EU to the US.
(By Polina Devitt; Editing by David Goodman and David Evans)
