💰 U.S. metal prices are on the rise, thanks to President Donald Trump's bold tariff moves! The 25% tariffs on steel and aluminium have sent industrial metal prices soaring as the industry grapples with sourcing enough materials domestically.
While the goal is to support struggling U.S. metal producers, reopening closed plants and building new ones takes time. In the meantime, traders are hiking up U.S. metal prices, affecting automakers and other industries that rely on foreign metals.
The biggest hit is on aluminium, crucial for transport, construction, and packaging. With around 82% of U.S. aluminium needs met by imports, prices have surged by 35 cents per pound since Friday and skyrocketed 60% since Trump was elected. 📈
Analysts like Volkmar Baur from Commerzbank warn that expanding domestic aluminium production to replace imports would require massive and rapid investment. Meanwhile, industry leaders are praising the tariffs but acknowledging the challenges ahead.
Mark Duffy, president of the American Primary Aluminium Association, hailed the tariffs as a great day for the U.S. aluminium industry. However, with U.S. aluminium production significantly below demand, experts like Amy Gower from Morgan Stanley estimate it could take 6 to 12 months to ramp up production.
Brian Hesse, CEO of New York-based PerenniAL, plans to pass on price increases to customers, emphasizing the need for thoughtful, long-term expansion of domestic aluminium production. 🏗️
Steel prices are also jumping, with U.S. hot rolled coil steel prices up nearly 40% since last Thursday. Analysts warn that while supply might grow, it won't keep up with demand, potentially leading to higher prices and a possible trade war's negative impact on economic growth.
Across the border, Canadian aluminium producers are ready to compete but caution that higher prices could hurt U.S. consumers, drawing parallels to the disruptions seen with earlier tariffs.
As fears of slower economic growth and reduced metals demand grow, global industrial metals prices saw a broad retreat on Tuesday. While copper tariffs are not yet in effect, threats of duties have already driven U.S. copper futures to a record peak.
Stay tuned as the situation develops and the ripple effects of these tariffs unfold across industries and markets.
Reference(s):
cgtn.com
