U.S. industrial metals prices climbed sharply this week as markets adjust to former President Donald Trump's 25% tariffs on steel and aluminum imports. Analysts warn the policy could strain domestic supply chains while sparking fears of renewed trade tensions.
Aluminum in Focus
Morgan Stanley data reveals 82% of U.S. aluminum demand relies on imports—a gap that domestic producers can't quickly fill. The U.S. aluminum premium over global benchmarks has jumped 60% since 2016, hitting 35 cents/pound this week. “You can’t replace imports overnight,” said PerenniAL CEO Brian Hesse, noting reviving idled smelters could take 6-12 months.
Steel and Copper Concerns
U.S. hot-rolled steel coil prices rose nearly 40% in days, with analysts warning shortages could persist. While copper avoided immediate tariffs, Comex futures premiums spiked to record highs amid speculation. UBS analyst Andrew Jones cautioned: “The bigger risk is a trade war slowing global growth.”
Production Challenges
Despite optimism from U.S. industry groups, domestic aluminum production has plummeted from 3.7 million tonnes in 2000 to 670,000 tonnes in 2023—far below the 4.3 million tonnes consumed annually. Aluminum Association CEO Charles Johnson stressed: “We need more smelting capacity to support manufacturers.”
Canadian producers warned of consumer impacts, recalling how 2018 tariffs disrupted markets. As global metal prices waver amid trade uncertainty, industries brace for prolonged adjustments.
Reference(s):
cgtn.com
