Late February sees contrasting trends in aluminium ingot markets as US premiums are spiking due to tariff uncertainty, while Germany experiences price growth amidst declining inventories and broader global trade tensions.

The US aluminium ingot market reacted with heightened uncertainty in late February, as a 1.8% price increase during the week ending February 21^st was overshadowed by impending tariffs. While the Aluminium Monthly Metals Index (MMI) showed a slight 1.11% gain from January to February, the announcement of 25% tariffs on imports from Canada and Mexico (March 1st) and all steel and aluminium (March 12th) triggered market scrambling.

Despite strong spot prices indicating a bullish market, LME aluminium prices only saw a moderate 2.28% increase in January, followed by a further 1.17% in the first half of February. The surge in U.S. premiums is driven by aluminium ingot buyers accelerating purchases ahead of upcoming tariffs.

Despite the implementation of 25% tariffs on steel and aluminium imports, intended to protect domestic producers, the US primary aluminium industry is collapsing, now down to only four smelters. High energy expenses and relentless competition from overseas, particularly China, are driving this decline in the aluminium ingot market.

Driven by rising US aluminium prices due to import tariffs, Emirates Global Aluminium (EGA) intends to expand its US presence through further acquisitions, building on its initial purchase last year. While US-based EGA production will mitigate tariff impacts, aluminium exports from the UAE to the US will remain subject to these levies. The US, heavily dependent on aluminium imports, sources significant volumes from Canada, the UAE, and Mexico.

The European aluminium industry, represented by European Aluminium, is deeply alarmed by the U.S.'s decision to impose a 25% tariff on aluminium imports. They are urgently requesting the European Commission to engage in immediate discussions with the U.S. to find a solution that protects European interests. While the German aluminium ingot market has stabilized compared to the volatility seen after the initial Trump tariff announcement, investors remain apprehensive about potential retaliatory measures from other nations, fearing a global trade war and a deteriorating economic climate.

German aluminium ingot prices rose by 1.7% in the week ending February 21st, driven by a simultaneous drop of over 3% in LME aluminium inventories, which fell to 543,900 tonnes by February 19th. Additionally, a new round of EU sanctions against Russia, confirmed on February 19th and set for formal adoption on February 24th, could further impact aluminium ingot prices.

Industry analysts forecast approximately 6% increase in aluminium ingot prices throughout 2025, primarily due to an anticipated supply shortfall. Furthermore, potential tariffs imposed by major economies and escalating geopolitical tensions could inject significant volatility into the aluminium ingot market.