In the wake of President Donald Trump’s decision to double tariffs on steel and aluminum imports from 25% to 50%, the nonferrous metals market has seen a flurry of concerns regarding shifting fundamentals. During an industry event held from June 2-5, various market players expressed their apprehensions about the impact of these tariffs. Following the tariff increase, Midwest Premium values surged nearly 15%, prompting traders and consumers to anticipate potential demand destruction, although they expect any significant effects not to materialize until around October 2025.
Uncertainties surrounding long-term demand, sector performance, domestic supply expansion, and changes in global trade flows were common among industry insiders. Despite increased tariffs, some market participants noted that the U.S. will still rely on imports for aluminum sourcing, indicating that tariffs alone won’t resolve the underlying issues. A producer pointed out the challenges of demand forecasting in an uncertain macroeconomic environment, stating, “It’s going to be different planning for next year.”
Looking ahead, demand destruction is expected particularly in the automotive and building sectors.
While some traders noted a relatively robust aerospace sector, others expressed concerns about potential slowdowns, particularly in electric vehicles. This uncertainty is compounded by global trade policy volatility, leading to changes in aluminum trade flows, such as canceled shipments from South America and redirected Canadian supplies due to strong local demand. Additionally, investment announcements, like the $4 billion smelter by Emirates Global Aluminum in Oklahoma, have met skepticism from consumers who doubt the project’s viability due to unresolved energy agreements.
Meanwhile, prices for the Midwest Premium hit record highs, showing steep increases with assessments indicating levels nearly three times higher than early 2025 values. The rise in premium values, coupled with a loosening supply of scrap and potential countermeasures from the European Commission regarding export fees, adds further complexity to the already dynamic aluminum market.