As reported on February 11, the industrial metals industry experienced turbulence and large price fluctuations at the beginning of this year, which was mainly attributed to the uncertainty surrounding potential tariffs and trade restrictions. In addition, the interaction of geopolitical factors and macroeconomics has further exacerbated the price fluctuations of industrial metals.
The United States said that it would impose a 25% tariff on all imported steel and aluminum, and these tariffs would apply to all countries, including major suppliers such as Mexico and Canada. According to data released by the US government, about 90% of the scrap aluminum imports in the United States rely on Mexico and Canada.
The U.S. automotive and manufacturing industries are heavily dependent on imported aluminum and steel and are deeply integrated with the U.S. supply chain.
Industry experts said that tariffs are also likely to affect U.S. aluminum demand, as the additional costs are likely to be passed on to end consumers. "We may also see changes in aluminum trade flows. Canadian exports may be redirected to Europe because it can enter the European market duty-free, which is not good for European aluminum premiums."
The United States currently imports only about 4% of its total aluminum imports from China.
"While the U.S. tariffs on imported aluminum may drive aluminum prices soaring in the short term, the prospect of global trade disputes is not good for LME aluminum prices."
