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The re-election of former President Donald Trump on Tuesday November 5 has sparked renewed expectations in the US aluminium market.
“People feel that Trump is going to be bullish for the market, particularly in terms of continuing tariffs and maybe keeping interest rates a little lower,” one source told Fastmarkets. “But at the same time, some of the higher tariffs may become restrictive on other origins; could also be inflationary.”
Analysts noted that despite immediate election volatility, aluminium prices have remained resilient.
“In the very short term, Fastmarkets research still deems any weakness in aluminium price action to be temporary, as the election uncertainty will soon give way to a more positive macroeconomic backdrop — namely further cuts in interest rates from the US Federal Reserve Bank,” Fastmarkets analyst Andy Farida said.
While tariffs and trade sanctions remain on the horizon, tight upstream supply and recent disruptions continue to keep the price up, Farida said.
The election result has removed some uncertainty, and aluminium traders are now more willing to finalize contracts for the upcoming year.
“One uncertainty is out of the market,” another US-based source said. “I think it’s positive for business getting done into the next year.”
Aluminium prices have recently been bolstered by upstream supply constraints, including disruptions in Guinea’s bauxite exports and low alumina inventories. Some sources believe these factors, combined with anticipated Trump-led policy shifts, could push prices higher in the short term.
Fastmarkets last assessed the aluminium P1020A premium, ddp Midwest US at 20-21 cents per lb on Thursday November 7, unchanged since November 1.
Analysts cautioned that further protectionist policies could eventually impact global trade dynamics, with the latter half of 2025 potentially facing headwinds.
Aluminium market participants are waiting to see whether Trump’s administration will further intensify trade measures against China, as well as the potential impact on US trade relationships with Canada and Mexico.
“Trump’s stance on China is clear. We’re watching closely for any changes in trade policy that might affect aluminium imports,” one source noted.
Market participants highlighted to Fastmarkets that they are worried Trump might approve restrictive measures like he did in the past, affecting the Latin American aluminium industry.
“Latin American aluminium [participants] may suffer with the Trump administration due to protectionism, as there are many markets that are dependent on the USA for exports. In Latin America, the most affected would be Mexico, because greater taxation may be imposed by the new president,” a trader source in the region said.
“We are worried that Trump might increase tariffs and cut the nearshoring,” a Mexican producer said.
Data from the Mexican government shows that in 2023 83.8% of Mexican “aluminium and its products” was exported to the US, while 72.7% of unwrought aluminium went to the country.
In 2018, Trump imposed 25% tariffs on steel imports and 10% on aluminium, using Section 232 of the Trade Expansion Act of 1962.
According to the Congressional Research Service, Section 232 allows the President to impose import restrictions based on an investigation and affirmative determination by the Department of Commerce that certain imports threaten to impair US national security.
In January 2020, Trump expanded the scope of the tariffs to include certain derivative goods. US imports from Mexico are exempt from Section 232 tariffs due to an independent agreement between the US, Mexico and Canada previous to the United States-Mexico-Canada Agreement (USMCA), which entered into force on July 1, 2020. The USMCA replaced the North America Free Trade Agreement (NAFTA).
Actions under Section 232 have generated debate in Congress and at the multinational level in the World Trade Organization (WTO).
Fernando Garcia Martinez, vice-president of operations at Mexican aluminium institute IMEDAL, said that the most important issues for the aluminium industry regarding the Trump administration are his protectionist policies and the review of the current trade agreement.
“The United States will seek a tightening of the requirements of origin and greater restrictions on the use of materials from Chinese companies, particularly in the automotive industry,” Garcia said.
“In all cases, the weapon that will be used to pressure Mexico will be the increase in import taxes. It is clear that the policy followed in the past of increasing tariffs has not caused, as expected, greater investments in the United States industry to generate more jobs. Instead, it has caused greater inflation, because who ends up paying these increases is the consumer himself. On the other hand, the United States must recognize that it needs Mexico, due to the current integration of the productive chains and the advantages that Mexico offers,” he added.
For Farida, Trump’s second term is a confirmation that the price all finished goods and perhaps even raw materials imported from Mexico, or any Latin American region that allows Chinese factories to be operational, will increase by several folds.
“While the tariffs discussed appear mind-blowing, we are unsure what the final numbers will be and if the final cost of import will settle or perhaps simply match with the price of an item that is made from neighboring Canada or even in the USA. Rather, those extra tariffs are likely to result in tit for tat war-like protectionist control that will surely reignite inflationary pressure and soon creep into higher costs of living for the American consumer,” Farida added.
In July, the White House announced that aluminium that is shipped from Mexico must not contain primary material that was smelted or cast in China, Russia, Belarus or Iran – otherwise it does not qualify for the section 232 exemption and will be subject to a 10% tariff. Material from Russia was already subject to a 200% tariff, thus resulting in a total rate of 210%.
The new measure requires aluminium importers into the US to present proof to US Customs and Border Protection (CBP) of the material’s country of origin in the form of a certificate of analysis, showing that the country of first smelter, second smelter and casting is not one of the four listed above.
Janaina Donas, the executive president of the Brazilian Aluminium Association (ABAL), told Fastmarkets that it is still too early to have a definitive opinion about the impact of the American elections on the Brazilian aluminium sector.
“Although [Trump’s] trade policy followed a more protectionist line with the implementation of Section 232, which imposed tariffs on imported aluminium, it is important to note that the subsequent Democratic administration did not undertake any movement to review or reverse these tariffs. This scenario suggests a certain continuity in the American approach to protecting strategic industries, regardless of the current administration,” Donas said.
“For Brazil, in line with most emerging countries, a large part of national aluminium production is intended to meet domestic demand, with international trade playing a secondary, but still relevant, role. The possibility of new surcharges or barriers is a concern for the sector, as these measures not only make it difficult to access markets in which we are competitive, but also increase the risk of trade diversion. Furthermore, they increase Brazil’s exposure to unfair trade practices from other regions, reinforcing the need for strategies that protect the competitiveness of Brazilian industry in an increasingly challenging global environment,” she said.
Fastmarkets assessed the fortnightly aluminium P1020A premium, low-VAT market, delivered São Paulo region at $250-300 per tonne on October 29, stable since October 1.
Meanwhile, the aluminium P1020A premium, high-VAT market, delivered São Paulo region stood unchanged from a fortnight earlier, at $140-180 per tonne on October 29.
Participants in Europe were also watchful of the newly announced presidency and its potential impact on the market.
“The Trump win is definitely bullish [for the Midwest] premium – whether because of tariffs, improved manufacturing activity, or both,” one trader in the region said.
“If it gets to a point where the US is actually competing again for the fairly limited global supply of unplaced P1020, then it would indeed be extremely bullish for European premiums, which have moved higher without even having the element of having to outbid the US for metal,” the trader added.
Rising freight costs, lean domestic inventories and elevated premiums achievable in some Asian markets helped support higher transaction levels in Europe across 2024.
Fastmarkets assessed the aluminium P1020A premium, in-whs dp Rotterdam at $325-355 per tonne on Tuesday, unchanged from the previous week’s assessment, but rising by 68% from $190-215 per tonne at the beginning of the year.
The duty paid premium in Rotterdam peaked at a midpoint of $342.50 per tonne earlier in the year, its highest level since October 2022.
Fastmarkets assessed the aluminium P1020A premium, in-whs dup Rotterdam at $280-300 per tonne on Thursday November 7, unchanged since September 17.
But while the US has remained largely rangebound throughout the year, European participants are noting some concern over domestic availability should the US premium gain support.
“[It’s possible in the near term] that a strong [Midwest premium] keeps Canadian tonnes in North America and attracts [Australian] tonnes out of Asia, indirectly also reducing tonnes that could come to Europe,” a third trader added.
“The [Chicago Mercantile Exchange] contango on [the Midwest premium is] also incentivizing plans to send metal there,” they said.
The CME aluminium Midwest US premium cash-settled forwards were most recently trading at 22.6 cents per lb for January 2025, and 23 cents per lb for July 2025.
“A landslide re-election win for [Trump] signifies that additional trade tariffs and sanctions could emerge in the coming months,” Farida said on Wednesday November 6.
“Additional trade tariffs and sanctions on China is no longer a new idea. Instead, tariffs and sanctions may have less of the desired price and impact. Still, we think Trump and the Republicans controlling the senate and congress will allow Trump to make his mark,” Farida added.
Others pointed to a more negative impact on regional demand, however.
“The ‘Trump effect’ is too early to assess, but we could see more protectionism policies, which will impact demand even more,” a fourth trader said. “We have another two plus months before we get more clarity on the issue.”
Discover how the 2024 US election is impacting and could impact US and global commodity markets with Fastmarkets. Head to our US election hub.