Published by Global Banking & Finance Review®
Posted on January 8, 2026
3 min readLast updated: January 20, 2026
Add as preferred source on GoogleUS aluminium prices soar due to tariffs and low stocks, affecting industries like automotive and aerospace, with costs rising over 40%.
By Pratima Desai
LONDON, Jan 8 (Reuters) - Aluminium consumers in the United States are paying record high prices, significantly above the level import levies and transport costs would warrant, as tight supplies globally aggravate the impact of tariffs and low U.S. inventories.
Needed by industries such as automotive, aerospace, packaging and construction, aluminium prices have knock-on effects for the wider economy as they raise manufacturing costs, squeeze margins and ultimately drive inflation.
President Donald Trump doubled tariffs on U.S. aluminium imports to 50% in June to encourage investment in local production. Since then aluminium costs for U.S. consumers have risen by 40% to above $5,200 a metric ton.
Apart from the disruption of U.S. tariffs, aluminium traders have been monitoring supply shortfalls elsewhere.
The potential for shortages has driven prices on the London Metal Exchange up by more than 20% over the last 12 months to the highest since April 2022, a few weeks after Russia invaded Ukraine and consumers started to shun Russian aluminium.
US ALUMINIUM STOCKS SHRINK
Buyers on the U.S. physical market typically pay the LME aluminium price plus a premium that covers costs such as freight, handling, insurance and taxes.
As the LME price rises, the tax component of the premium rises because the tariff is a percentage. At $3,100 a ton, the duty on aluminium shipments to the United States would be $1,550 from around $1,300 in June.
Meanwhile, the Midwest aluminium premium this week hit a record high of 96 cents a lb or $2,116 a ton, up 65% since June.
"The premium is way higher than costs justify. One factor is the market expecting the LME price to trend higher," said Jorge Vazquez, managing director at consultancy Harbor Aluminum, adding that the premium should be around 86 cents a lb.
Exporters diverted their aluminium to Europe from the United States last year because the premium did not fully reflect the tariff, meaning local stocks shrank.
Vazquez and Gregory Wittbecker, President at Wittsend Commodity Advisors, estimate U.S. aluminium stocks have dropped below 300,000 tons from 750,000 tons at the start of 2025.
"Canadian suppliers stopped discretionary shipments to the U.S. because they were losing money, which led to a drop in U.S. inventories," Wittbecker said. "The shortage of physical aluminium in the U.S. is being priced, but I have doubts as to how far the premium can continue to rise."
According to information provider Trade Data Monitor, the United States imported nearly four million tons of aluminium in 2024 with Canada accounting for 70% of the shipments.
(Reporting by Pratima Desai; editing by Barbara Lewis)
Aluminium is a lightweight, silvery-white metal used in various industries, including automotive, aerospace, and construction, due to its strength and resistance to corrosion.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
The London Metal Exchange is a global marketplace for trading metals, including aluminium, where prices are determined based on supply and demand.
A premium in trading refers to the additional cost above the market price that buyers pay for a commodity, often due to factors like demand and supply constraints.
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