Canada to divert aluminum to Europe in response to Trump tariffs
globalnews.caThe cost of aluminum for consumers in Europe buying on the physical market has dropped due to expectations that Canadian shipments under U.S. tariffs from Tuesday will be diverted, physical market traders said.
U.S. President Donald Trump has imposed 25 per cent tariffs on Mexican and most Canadian imports and ten per cent on goods from China starting on Tuesday, potentially kicking off a trade war that could dent global growth and reignite inflation.
Consumers on the physical market pay the London Metal Exchange (LME) benchmark aluminum CMAL3 plus a premium which covers taxes, transport and handling costs.
The European duty-paid premium EPDG25 aluminum contract on COMEX, that expires on Feb. 28 has dropped more than ten per cent to around $322 a ton from near $370 a ton at the start of January.
The U.S. is a major importer of aluminum used widely in the transport, packaging and construction industries, shipping in 5.46 million metric tons of aluminum products in 2023, according the U.S. Commerce Department.
According to the Commerce Department, Canada accounted for 3.08 million tons or 56 per centof aluminum product imports to the United States for domestic consumption in 2023, the latest full year data available.
Meanwhile, the European Union imported nearly 158,000 tons of aluminum – primary and alloy – from Canada between January and November last year or only 2.9 per cent of its needs, according to Trade Data Monitor (TDM).
Those numbers compare with more than 110,000 tons and 1.9 per cent in the same period in 2023, according to TDM data.
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