Cutting Canada tariffs alone won't flatten US aluminium premium, Alcoa says
The steep premium paid for aluminium in the US will not drop significantly even if Washington halves the tariffs on metal from neighboring Canada, because imports from other countries will still be needed, Alcoa's finance chief said on Thursday.
The price US consumers pay on top of the London Metal Exchange benchmark for physical aluminium, known as the Midwest premium, is high at $1.09/lb, or $2 403 a ton, but has eased from a record $1.19 in June on hopes the 50% import tariff could be halved for Canadian material.
Speaking at the Jefferies Global Industrials Conference in New York, Alcoa CFO Molly Beerman noted that the US needed to import around four-million tons of aluminium a year and Canada could only supply three-million tons of that.
"With the US still needing to incent the import of a million tons, even if we were to have a favorable rate with Canada, we don't see Midwest dropping significantly," Beerman said. "It might come off a little bit, but we wouldn't see it returning to pre-tariff levels."
If there is tariff relief or waivers for other trade partners - such as Japan, South Korea or Europe - and the last one-million tons is covered, "then you can expect the Midwest premium to reduce in response to essentially wipe out the tariff benefit," Beerman said.
Pittsburgh-based Alcoa produces around 900 000 tons a year of aluminum in Canada and is paying more than $1-billion in tariffs to bring most of it into the US, Beerman said. "However, the Midwest is fully compensating us for that, as well as returning as margin because of the tightness in tons."
With aluminium supplies from the war-hit Middle East constrained, customers in North America and Europe are "actively looking for our supply," Beerman said, noting that Alcoa's order book was "almost completely sold out for the rest of 2026."
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