Cutting Canada tariffs alone won't flatten US aluminum premium, Alcoa says

Sept 10 (Reuters) - The steep premium ‌paid for ​aluminum in ​the U.S. will not drop significantly even if Washington halves the tariffs on metal from neighboring Canada, because imports from other ‌countries will still be needed, Alcoa's finance chief said on ⁠Thursday.

The price U.S. consumers pay on top of the London Metal Exchange benchmark for physical ‌aluminum, known as the Midwest premium, ‌is high at $1.09 per lb, or $2,403 per metric ton, but has eased from a record $1.19 in June on hopes the 50% import tariff could ​be halved for Canadian material.

Speaking at the Jefferies Global Industrials Conference in New York, Alcoa Chief Financial Officer Molly Beerman noted that the ⁠U.S. needed to import around 4 million tons of aluminum per year and Canada could only supply 3 ​million tons of that.

"With the U.S. still needing to incent the import of a million tons, even if we were to ​have a favorable rate with Canada, we ‌don't see Midwest dropping significantly," Beerman said. "It might come off a little bit, but we wouldn't see it returning to ⁠pre-tariff levels."

If there is tariff relief or waivers for other trade partners -- such as Japan, South Korea or Europe -- and the last 1 million tons is covered, "then you ⁠can expect the Midwest premium to reduce in response to essentially wipe out the tariff ​benefit," Beerman said.

Pittsburgh-based Alcoa produces around 900,000 tons per year of aluminum in Canada and is paying more than $1 billion in tariffs to bring most of it into the ‌U.S., Beerman said. "However, the Midwest is fully compensating us for that, as well as returning as margin because of ‌the tightness in tons."

With aluminum supplies from the war-hit Middle East constrained, customers in ⁠North America and Europe are "actively ‌looking for our supply," ​Beerman said, noting that Alcoa's order book was "almost completely sold out for the rest of 2026."

(Reporting by Tom Daly; Editing by ‌David Gregorio)

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