The surprise removal of the Section 232 tariff on US aluminium imports from Canada caught aluminium traders in North America and Europe off guard, injecting enormous uncertainty into the market and into aluminium premium outlooks.
Muted impact?
Most US traders were hesitant to offer predictions about the action's impact on the market.
Some traders anticipated little impact to the US Midwest aluminium premium, noting that the
tariff was effectively replaced with a hard quota. Some were even bullish, expecting the premium to dip temporarily before trending higher.
"There could be a knee-jerk reaction, but it will probably gravitate towards 16-17 cents," one US trader predicted.
Prior to the announcement, Fastmarkets assessed the
aluminium P1020A premium, ddp Midwest US at 15-16 cents per lb on Tuesday September 15, unchanged since August 28.
When the now-revoked duties were reintroduced in August, the Midwest aluminium premium jumped significantly, rising to 16-17 cents per lb on August 7 - up by 43.5% from 11-12 cents per lb previously and up by 88.6% from the year-to-date low of 8-9.5 per lb seen between mid-May and mid-June.
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