SerpApi.Org
The Trump administration unveiled an incentive program Monday that would reduce tariffs on imported aluminum to 25% from 50% for companies that build, expand, or refurbish aluminum plants in the U.S.
The U.S. does not have enough primary aluminum capacity to meet demand and relies heavily on imports, especially from Canada and the Middle East, and the Trump administration had imposed the 50% tariff as part of an effort to boost domestic capacity.
Instead, the tariff has driven the U.S. Midwest premium sharply higher, causing U.S. manufacturers to pay the highest raw material prices in the world, and another supply shock caused by the Iran war helped boost the regional aluminum premium by nearly 100%.
Aluminum prices on the London Metal Exchange have climbed sharply this year as the dual shocks tightened the market; LME aluminum futures (LMAHDS03:COM) settled 0.3% lower to $3,140/metric ton before the White House announcement.
Potentially relevant stocks include Alcoa (AA), Century Aluminum (CENX), Kaiser Aluminum (KALU), and Constellium (CSTM).
