Premiums for aluminum in the US physical market surged on Monday after President Donald Trump announced plans to raise tariffs on imported steel and aluminum from 25% to 50%, effective June 4. The US depends heavily on aluminum imports, with about half of its usage, primarily in transportation, packaging, and construction sourced from abroad, especially in Canada.

The US Midwest duty-paid aluminum premium climbed to US$0.58 per pound, or US$1,279 per metric ton, marking a 54% increase from last Friday and a 164% rise since the beginning of 2025. Part of this spike was attributed to June 2 being the first trading day of the month, when premiums often adjust sharply.

Morgan Stanley noted the elevated premiums could reduce spot market activity as buyers wait for potential policy reversals or exemptions. The US domestic aluminum production remains limited, with no new smelters built in 45 years. Emirates Global Aluminium plans to invest US$4 billion in a US plant with an annual capacity of 600,000 tons.