European Aluminium Premium Surges Amid US-Canada Tariff Speculation
By Ian Williams, manager
Aluminium premiums in Europe have surged to their highest point in nearly four months, with two industry sources attributing this increase to fears that a potential reduction in US tariffs on Canadian aluminium might result in a supply shortage on the continent.
On Thursday, the front-month COMEX European duty-paid aluminium premium EPDc1, which is added to the benchmark London Metal Exchange aluminium prices CMAL3 for physical metal, climbed to $574 per metric ton. This marks a 10% rise from the previous day and the highest level since June 8, according to LSEG data released on Friday.
The European premium has been on an upward trajectory in recent weeks amid reports that US President Donald Trump’s 50% tariff on aluminium imports might be reduced to 25% for materials coming from neighboring Canada.
Trade Talks Stall, Aluminum Dynamics Shift
Negotiations between Washington and Ottawa broke down in mid-August, yet Trump expressed optimism on Monday about reaching a trade agreement with Canada. If tariffs are reduced, it would facilitate the flow of Canadian metal into the U.S. Notably, EU imports of aluminum from Canada surged by 80% year-on-year from January to July, reaching 269,839 tons, as the bloc sought to offset shortages due to conflicts in the Middle East.
Despite tight supply in Europe, the COMEX Japan aluminum premium PJMc1, a key Asian market benchmark, has decreased by 35% since late July, recently hitting $226 a ton, the lowest since mid-March. CRU, a consultancy firm, noted in a recent report that Asian aluminum premiums are falling as inventories rise and demand remains weak, predicting that new capacity set for 2027 will arrive in Asia first, potentially adding further pressure.