U.S. aluminium premiums jump 155% as tariffs and supply constraints escalate

• Import tariffs and supply deficit lift prices
• Market remains tight despite soft Chinese demand

Premiums for consumers buying aluminium on the U.S. physical market have hit record highs, driven by steep import tariffs and tightening global supplies. President Donald Trump doubled tariffs on aluminium imports to 50% on June 4 to encourage domestic production of the metal, widely used in construction, power, and packaging sectors.

The duty-paid US domestic premium–a key benchmark covering freight and taxes–has surged 155% since January, reaching 88.10 cents per pound ($1,942/t). When combined with the LME aluminium price of $2,850/t, U.S. spot buyers are now paying about $4,792/t.

At current price levels, import duties amount to $1,425/t, up sharply from around $560 at the start of the year. The rise also reflects declining U.S. inventories and market expectations that tariffs will remain permanent, particularly after trade talks with Canada were called off in October.

Canada remains key supplier amid trade tensions

The United States remains heavily reliant on Canada for aluminium, which accounted for about 70% of total imports–around 2.6-2.8 mnt last year. With negotiations suspended, traders see little prospect of tariff relief before the end of Trump’s term.

“Trump basically said no deal until the end of his term. So even the optimists around a potential deal have retreated for now,” said a trader.

Global supply constraints intensify

U.S. consumers are also competing fiercely for aluminium amid a global supply squeeze. China’s 45-million-tonne output cap and production disruptions in key regions have constrained availability. It is expected a 1.8-million-tonne aluminium deficit this year.

Additionally, China’s net exports of refined and semi-fabricated aluminium have fallen by 900,000 t annually, while production outside China has dropped 1.1 million tonnes per year–together reducing global supply by roughly 2 mnt.

What to expect ahead?

Aluminium prices are likely to remain firm in the near term, with projections at around $3,000/t by the first quarter of 2026. The market remains “balanced but tight,” supported by production outages in Iceland, possible capacity losses in Mozambique, and China’s output restrictions.

Aluminium is also benefiting from copper’s strength, which has lifted sentiment across base metals. However, new supply from Indonesia expected in 2026-27 could eventually ease prices, as producers are likely to ramp up output at levels close to $3,000/t.