US aluminum, steel futures rally as Trump reignites tariff war
Futures tied to aluminum and steel prices surged after US President Donald Trump announced plans to double tariffs on metal imports, signaling rising costs for American manufacturers and escalating trade tensions.
Contracts tracking the all-in price of aluminum delivered to the US Midwest jumped 54 per cent on the Comex exchange in New York, reaching their highest level since at least 2013. The increase follows Trump’s announcement on May 30 that tariffs on aluminum and steel would rise to 50 per cent from June 4, Caliber.Az reports, citing foreign media.
Aluminum, used in products ranging from beverage cans and car engine blocks to window frames, is now priced at a premium of 58 cents per pound — or approximately $1,280 per ton — over benchmark contracts traded in London. This price spike means US buyers could be paying nearly 50 per cent more than their international counterparts for the same material.
Trump’s tariff hike is aimed at protecting domestic producers and encouraging new investments in the US metal industry. The announcement led to a sharp uptick in after-hours trading for American steel and aluminum companies.
However, domestic construction firms have voiced concern over the price impact, warning that further levies on essential materials could increase the cost of infrastructure and housing projects. Previously, Trump had raised tariffs on these metals from 10 per cent to 25 per cent.
Comex steel futures also surged more than 8% on Monday, despite relatively low trading volumes. Analysts say the brunt of the tariff’s impact will fall on the aluminum market, which is significantly more reliant on imports than steel. According to Morgan Stanley, over 80 per cent of aluminum used in the US is imported, while less than 20 per cent of the country’s steel comes from abroad.
“We expect prices to rise — the US does not have enough domestic capacity of either,” analysts at Citigroup Inc. stated in an emailed note. For aluminum in particular, the tariffs have “mostly just functioned as a tax on consumers thus far.”
Benchmark aluminum contracts on the London Metal Exchange were trading 0.4 per cent higher at $2,454 a ton as of 1:35 p.m. local time.
By Vafa Guliyeva