Editor OilPrice.com
4 min read
Via Metal Miner
The Aluminum Monthly Metals Index (MMI) moved sideways as the global price of aluminum ticked modestly higher. Overall, the index rose 0.73% from May to June. Track other MetalMiner monthly indexes here, and compare how the overall industrial metal market is performing.
The Midwest Premium found a peak in mid-June. Following successive tariff-induced spikes throughout the year’s first half, the premium hit a new all-time high at $0.615/lb on June 9. This marked a staggering 161% rise since the start of 2025. However, in a relief to markets, the premium has since started to fall.
Source: MetalMiner Insights
While declines have proven modest thus far, the bias has shifted to the downside. The spot premium has fallen by over 3%, while the three-month futures contract suggests further declines. Futures now sit almost 14% lower than their respective peak as the reaction to tariffs appears to be over. Markets now seem to be pricing in the impact of considerably higher aluminum prices in the U.S., potentially out of concern over demand destruction in the months ahead.
Source: MetalMiner Insights, Chart & Correlation Analysis Tool
U.S. aluminum tariffs, which now sit at 50%, have significantly increased the price of aluminum in the United States. However, those costs are now weighing heavily on the demand outlook. While tariffs raise the floor for aluminum prices, they do not mean the market has reached a bottom just yet. Higher prices kill higher prices, and now, manufacturers appear to be buckling under the weight of the sharp material increases seen since the start of the year.
Source: MetalMiner Insights
Prior to the spikes, the market appeared largely sideways. Suppliers characterized demand as steady, albeit not as high as what would be considered healthy. Over recent years, the U.S. manufacturing sector has mostly trended in contraction, and the Institute for Supply Management’s Manufacturing PMI continues to trend at weak levels. Throughout May, the PMI fell for the third consecutive month, dropping to 48.5. A reading below the 50 mark suggests an overall contraction in the U.S. manufacturing sector.
Demand conditions have appeared to wane in the aftermath of tariff announcements. Now, markets are awaiting the outcome of trade negotiations, which could pull the premium much lower.
So far, the UK has received a temporary exemption from the additional 25% increase on aluminum duties. Ongoing negotiations have hinted that this could result in a quota, like what occurred under the Biden administration. However, the recent trade deal with the UK did not address steel and aluminum, both of which could be adjusted pending a Commerce Department review.
