Commerzbank’s Thu Lan Nguyen reports that the US aluminium supply remains strained more than a year after the introduction of import tariffs, with little sign of improvement in the domestic supply situation [1]. Despite the tariffs, domestic aluminium production in the US actually declined last year, according to the US Geological Survey (USGS) [1]. This decline affected both primary and secondary aluminium production [1].
A planned aluminium smelter in Oklahoma, which could have increased domestic capacity, has been blocked due to environmental and ownership concerns, further limiting the potential for supply relief [1]. In contrast, imports of aluminium scrap, which are exempt from the tariffs, increased significantly, likely in response to the tight market and high prices [1].
High aluminium prices and persistently elevated import premiums have dampened demand in the US market [1]. Commerzbank warns that the market balance may be achieved primarily through demand destruction rather than the addition of new production capacity [1]. The bank highlights a significant risk that the strained US market will be relieved mainly by reduced demand, not by increased supply [1].
CONCLUSION
US aluminium supply remains tight, with tariffs failing to boost domestic production and a key smelter project stalled. Commerzbank cautions that market balance may come mainly from demand destruction, as high prices and import premiums continue to weigh on consumption. The outlook for significant capacity expansion in the US aluminium sector appears limited in the near term.