US aluminum and steel prices surge as Trump doubles tariffs
Futures tracking aluminum and steel prices in the U.S. surged after President Donald Trump said he would double tariffs on the metals this week.
Contracts linked to the prices that manufacturers pay to get aluminum delivered to the U.S. Midwest jumped 54% to the highest since 2013 on the Comex exchange in New York on Monday - offering an early glimpse of the much higher costs for American factories, with import levies set to rise to 50% from Wednesday.
Aluminum used in everything from beer cans to engine blocks and window frames was priced at a premium of 58 cents a pound, or about $1,280 a ton, in the Midwest over benchmark London contracts. That suggests U.S. buyers could end up paying about 50% more than international competitors to get hold of the metal.
Trump hopes the increased levies will protect margins for domestic mills and spur investment in new production capacity, and shares of U.S. steel and aluminum makers surged in after-hours trading after the announcement on Friday. But construction companies have warned that levies on steel and aluminum - which Trump had already raised from 10% to 25% - will increase the cost of critical building materials.
Comex steel futures were up more than 8% before paring some of the gains on Monday - and while both contracts are relatively illiquid - the moves indicate that the commercial burden of the tariffs will weigh most heavily on the U.S. aluminum market. More than 80% of the aluminum used in the U.S. is supplied via imports, while less than 20% of the country's steel is sourced from overseas, according to Morgan Stanley.
'We expect prices to rise - the U.S. does not have enough domestic capacity of either,' analysts at Citigroup Inc. said in an emailed note. For aluminum in particular, the tariffs have 'mostly just functioned as a tax on consumers thus far.'
Benchmark aluminum contracts on the London Metal Exchange traded 0.9% higher to settle at $2,466 a ton at 5:50 p.m. local time. Copper was up 1.2% in London and nearly 4% higher on Comex, as analysts said the heightened levies make it more likely that Trump will follow through with plans to place tariffs on the metal.
'The market also appears to be pricing a higher likelihood of copper tariffs, with COMEX outperforming LME,' Morgan Stanley analysts led by Amy Gower said in an emailed note, noting that U.S. buyers have been front-loading imports ahead of potential tariffs. 'For now, the COMEX premium is likely to continue pulling material to the U.S., drawing down ex-U.S. inventories and keeping ex-U.S. markets tight.'
With assistance from Jack Farchy and Yvonne Yue Li.
Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
9 minutes ago
- The Hill
Israel signed a record $14 billion in defense deals last year despite Gaza war criticism
JERUSALEM (AP) — Israel signed defense contracts worth nearly $15 billion last year, surpassing its all-time record, the country's defense ministry said Wednesday, even as international outrage mounts over the war in Gaza. Over half the deals were with European countries. The contracts — a 13% increase from 2023, itself a record year — came as Israel faces growing international condemnation and isolation over the nearly 20-month war. Some of Israel's closest allies, including Canada and France, recently stepped up their censure of Israel's actions in Gaza, and the U.K. suspended free trade talks. Some critics of Israel's conduct in the Palestinian enclave have called for countries to suspend trade with it. Some countries have taken steps to suspend defense contracts with Israel. Spain on Tuesday said it had canceled a deal for anti-tank missile systems that were to be manufactured in Madrid by a subsidiary of an Israeli company. A breakdown of Israel's 2024 defense deals by region: — European countries: 54% — Asia-Pacific: 23% — Arab countries that have normalized ties with Israel under the Trump-brokered Abraham Accords: 12% — North America: 9% — Latin America: 1% — Africa: 1% Nearly half the deals were for missiles, rockets and air defense systems, Israel's defense ministry said. Others included the sale of vehicles and armored personnel carriers, satellite and space systems and intelligence and cyber systems, among others. More than half of the agreements were worth over $100 million each. Israeli Defense Minister Israel Katz said the record amount was a 'direct result' of Israel's battlefield achievements throughout the wars that have roiled the Middle East since Hamas' Oct. 7, 2023, attack, in which militants killed 1,200 people and took 251 hostages. 'The world sees Israeli strength and seeks to be a partner in it,' Katz said in a statement. The war in Gaza has left much of the territory in ruins from Israel's punishing air campaign. The fighting has killed more than 54,000 people, mostly women and children, according to Gaza's Health Ministry, which does not say how many of the dead were civilians or combatants. A nearly three-month blockade on aid into Gaza also strained ties with Israel's international allies. Israel began allowing limited aid into the territory last month.
CNBC
10 minutes ago
- CNBC
Sen. Ron Johnson rips into 'immoral' GOP spending bill: 'I can't accept it'
Republican Sen. Ron Johnson on Wednesday blasted President Donald Trump's "one big, beautiful bill" as "immoral" and "grotesque," and reiterated that he will vote against it unless his GOP colleagues make major changes. "This is immoral, what us old farts doing to our young people," Johnson said on CNBC's "Squawk Box" after sounding alarms that the massive tax-and-spending-cut bill would add trillions of dollars to national deficits. "This is grotesque, what we're doing," Johnson said. "We need to own up to that. This is our moment." "I can't accept the scenario, I can't accept it, so I won't vote for it, unless we are serious about fixing it," he continued. Johnson has been among the Senate's loudest GOP critics of the budget bill that narrowly passed the House last month. Johnson and other fiscal hawks have taken aim over its impact on the nation's debt. The nonpartisan Congressional Budget Office estimated later Wednesday that the bill would add $2.4 trillion to the national debt over the next decade. Johnson has proposed splitting the bill into two parts, though Trump insists on passing his agenda in a single package. "The president and Senate leadership has to understand that we're serious now," Johnson said of himself and the handful of other GOP senators whose opposition to the bill could imperil its chances. "They all say, 'Oh, we can pressure these guys.' No, you can't." Republicans hold a narrow 53-47 majority in the Senate, so they can only afford to lose a handful of votes to get the bill passed in a party-line vote. "Let's discuss the numbers, and let's focus on our children and grandchildren, whose futures are being mortgaged, their prospects are being diminished by what we are doing to them," Johnson said. Johnson's comments came one day after Elon Musk ripped into the spending bill, calling it a "disgusting abomination" that will lead to exploding deficits. The White House brushed aside Musk's comments. Johnson said that Musk's criticisms bolster the case against the bill. "He's in the inside, he showed ... President Trump how to do this, you know, contract by contract, line by line," Johnson said of Musk. "We have to do that." Johnson said that his campaign against the bill in its current form is not a "long shot," because he thinks there are "enough" Republican senators will will vote against the bill. "We want to see [Trump] succeed, but again, my loyalty is to our kids and grandkids," he said. "So there's enough of us who have that attitude that very respectfully we just have say, 'Mr. President, I'm sorry, 'one, big, beautiful bill' was not the best idea," he added.
New York Post
11 minutes ago
- New York Post
Trump hiring freeze hurting quality of inflation data collection: report
Federal government staffing shortages from Trump administration hiring freezes have forced the Labor Department's economic statistics arm to curtail the breadth of its data collection for one of the main measures of US inflation, the Wall Street Journal reported Wednesday. The paper said the Bureau of Labor Statistics beginning in April reduced the number of businesses at which it checks prices for the benchmark Consumer Price Index report, citing the hiring freeze that President Trump imposed on his first day back in office, Jan. 20. 'The CPI temporarily reduced the number of outlets and quotes it attempted to collect due to a staffing shortage in certain CPI cities,' beginning in April, a BLS email to private economists and shared with the Journal read. 'These procedures will be kept in place until the hiring freeze is lifted, and additional staff can be hired and trained.' Advertisement CPI is among the most closely watched economic datasets published by the US government, relied upon by economists, investors and policymakers for near-real-time estimates of the state of inflation. REUTERS The Labor Department and BLS did not immediately respond to requests for comment from Reuters. CPI is among the most closely watched economic datasets published by the US government, relied upon by economists, investors and policymakers for near-real-time estimates of the state of inflation. Advertisement The Bureau of Labor Statistics beginning in April reduced the number of businesses at which it checks prices for the benchmark Consumer Price Index report, citing the hiring freeze that President Trump imposed. AP It provides a monthly snapshot of changes both to prices overall and among hundreds of separate products and services ranging from eggs to eyeglasses and airline tickets to automobiles.
