Aluminum Prices are Expected to Go Even Higher on Trump’s 25 Percent Tariffs and Geopolitically Impacted Output

According to Citigroup’s commodity research, aluminum and steel will be the metals hardest hit by President-elect Donald Trump's threat to impose 25% tariffs on imports from major suppliers Canada and Mexico. The U.S. normally purchases about 70% of its aluminum from abroad, 60% of which comes from Canada. Steel imports account for 24% of U.S. supply, with Canada supplying a quarter and Mexico supplying about 15%.

In its turn, BMI, a subsidiary of Fitch Solutions Group, recently noted that aluminum prices are expected to remain elevated in 2024 as strong global demand growth outstrips supply, leading to a tighter market balance. In a report released this week, the analyst firm expects aluminum demand to grow 3.2% YoY to 70.35 million tons in 2024, while the supply forecast is up only by 1.9% to 70.6 million tons, additionally aggravated by the ongoing geopolitical developments — particularly, Russia’s Rusal (RUAL.MOEX) losing its access to Ukrainian Nikolaev (Mykolaiv) Alumina Refinery.