United States

In the current Middle East conflict, aluminium plants have been targeted and some capacity has been taken out in what was expected to be a surplus market for primary aluminium. Most analysts now maintain that the aluminium market will be in deficit this year.

The USA brings around 20% of its imported aluminium through the Strait of Hormuz, which is mostly closed to traffic. At the same time, the USA has experienced gas price increases of nearly 50% since the start of the war. President Trump has also suffered serious damage to his ratings, especially regarding his handling of the economy and the war in Iran. Friction has also increased between President Trump and the EU, with more tariffs threatened on cars which could see an increase to 25%.

For now, the US economy continues to grow slowly, and the labour markets are stable. Inflation has risen owing to higher energy costs, which impact almost everything we purchase. From an industry perspective, higher fuel costs will affect business in the near term as domestic and ocean freight rates are higher and volatile. Most analysts expect that energy prices will remain elevated even if there is some sort of agreement to end the hostilities in the Middle East.

The all-in primary aluminium price including the regional premium continues to increase to record highs; the premium is up 10% since the previous Mirror report. There are serious concerns from market participants that aluminium may be at risk of substitution by steel and plastics owing to the run-up in pricing.

The Emirates Global Aluminium/Century greenfield project in Oklahoma continues to move ahead, with more urgency given the state of global primary aluminium supply.

Aluminium mill metal supply is still healthy, with plentiful recycled content available. Spreads are starting to tighten on extrusion and high magnesium inputs, while UBC and painted siding continue to trade at wider spreads. Secondary aluminium ingot prices have finally broken out from the very tight range of the last year; prices have risen by 50% since the beginning of the year, eclipsing US$ 2 per pound for a record high. Tight supply and expensive scrap have finally driven ingot producers to increase pricing.

Copper spreads have improved on high grades, with healthy demand. Domestic brass prices are following the tighter spreads seen in copper.