ING’s commodities team notes that talk of a partial rollback of US aluminium tariffs is unlikely to materially change market conditions. They stress that the core 50% levy on primary Aluminium remains, leaving domestic capacity constraints and elevated Midwest premiums intact. Global Aluminium supply is still tight, with inventories low and policy risk fragmenting regional markets.

US tariff focus fails to ease tightness

"Reports that the US administration is considering rolling back part of its aluminium tariff regime did little to shift market sentiment. Any changes under discussion appear focused on derivative products rather than primary aluminium, meaning the core 50% levy stays in place. As a result, none of the structural pressures in the US market ease – domestic smelting capacity remains limited, dependence on Canadian supply unchanged, and the Midwest premium elevated after last year’s tariff hike."

"Tariffs have already reshaped US trade flows, pushing primary metals away from the US and boosting scrap inflows, while some Canadian metal has been diverted to Europe. Even if derivative levies are eased, the current market dynamics won’t change much. And with exchange inventories effectively at zero, ongoing destocking and reports of large Q2 spot inquiries emerging, the physical market remains severely constrained."

"Any rollback limited to derivatives wouldn’t feed through to LME pricing and would have only a modest impact on the Midwest premium. The broader picture is unchanged – global aluminium supply remains tight, inventories thin, speculative positioning elevated, and regional markets increasingly fragmented by policy risk."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)