Aluminium premiums in Europe have jumped to their highest level in almost four months, with two industry sources attributing the jump to concerns that a potential cut in US tariffs on Canadian metal could leave the continent short of supply.
The front-month COMEX European duty-paid aluminium premium EPDc1, paid on top of benchmark London Metal Exchange aluminium prices CMAL3 for physical metal, rose to $574 a metric ton on Thursday, up 10% from the previous day and the highest since June 8, LSEG data showed on Friday.
The European premium has been rising in recent weeks on reports that US President Donald Trump’s 50% tariff on aluminium imports could be halved to 25% for material from neighbouring Canada.
Talks between Washington and Ottawa collapsed in mid-August, but Trump said on Monday he thinks a trade deal with Canada will be made.
A tariff cut would allow more Canadian metal to flow to the US; EU imports of aluminium from Canada rose by 80% year on year in January-July to 269,839 tons as the bloc sought to make up for shortfalls from the war-hit Middle East.
While supply in Europe remains tight, the COMEX Japan aluminium premium PJMc1, a reference price for the Asian market, has fallen by 35% since the end of July and this week hit $226 a ton, its lowest since mid-March.
“Asian aluminium premiums are retreating as inventories build and underlying demand remains weak,” consultancy CRU said in a recent note, adding that new capacity in 2027 would reach Asia first and could apply further pressure.
Three-month aluminium on the LME CMAL3 fell for a fifth day on Friday, touching $3,105 a ton, its lowest since July 7.
Diverging premiums: Europe soars as Asia sinks https://tmsnrt.rs/3VIUUxC
(Reporting by Tom Daly; additional reporting by Pratima Desai, Editing by Xevi Fontdegloria)
