The lack of clarity and frequent changes to tariffs on aluminium imports from Canada has caused the US primary aluminium spot market to nearly come to a halt, with buyers and sellers equally trying to avoid transactions, market participants told Fastmarkets. The uncertainty around which tariffs will be implemented and when has been keeping the spot market quiet, with sellers refraining from selling on the expectation that the premium will hike once the tariffs are imposed, according to a US-based trader.
“It is not a matter of the premium. Sellers don’t want to take the risk because [the premium] can be 50 [cents per lb] tomorrow. So, until they can hedge more favorably and they know what will happen, no one is looking to do business,” the trader said.
The primary aluminium premium in the US jumped on Wednesday March 12, the day tariffs of 25% went into effect on most aluminium imports from Canada.
Fastmarkets’s assessed the aluminium P1020A premium, ddp Midwest US at 43-48 cents per lb on Wednesday, up by 6.73% from 42.00-43.25 cents per lb the day prior.
The fact that there was nothing in official writing, as well as the frequent changes to the date tariffs were going to be imposed and their amount, has been creating chaos and making aluminium extrusion manufacturers in the country “extremely concerned,” according to an extrusion-maker in the US.
Early on Tuesday March 11, US President Donald Trump announced through his Truth Social account that he had ordered US Commerce Secretary Howard Lutnick to double tariffs on imports of aluminium and steel from Canada from 25% to 50%.
The move came as retaliation for an announcement by Ontario Premier Doug Ford the day prior that his province would impose a 25% surcharge on electricity shipped to New York, Minnesota and Michigan.
The president rescinded the increase later on Tuesday, after Ford announced he was suspending the 25% electricity surcharge following his conversation with Lutnick. The parties also said they would begin talks to renew the US-Mexico-Canada Agreement (USMCA,) which is due to expire on July 1, 2026.
A second trader said they are most concerned about this uncertainty slowing down the economy.
“And you won’t know for a while,” they said.
The US Aluminum Association also called for stability in regard to tariffs.
“President Trump’s administration is aggressively pursuing multiple tariff initiatives on behalf of the broader US economy. The US aluminium industry needs certainty in this tariff landscape to support our growth and investment,” association president Charles Johnson said in a press release on Wednesday.
“Today’s action closes loopholes in existing Section 232 tariffs that will support our industry’s expansion. However, we encourage President Trump and his administration to deliver a deal with Canada to ensure robust metal supply for US manufacturers and consumers, as he did in his first term with the USMCA [United States-Mexico-Canada Agreement],” Johnson added.
Companies looking to export to Canada from the US are also finding their costs increase as, concerned they might need to come back empty, trucking companies delivering into Canada have increased their charges, the second trader told Fastmarkets, adding that trucking costs increased by 40-50% in the past two months.
“At this point, you would hope to be doing a contractual business, and that you have a strong contract,” they said. “So, a well-written contract is worth a lot now.”
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