October 3, 2022

The Aluminum Association does not anticipate any revisions to the current Section 232 tariffs on aluminum imports, despite continuing talks with federal officials. However, the association stated that any proposed changes should “be made very carefully so they don’t upset the current market conditions.” These comments, first reported by Bloomberg, were made at an aluminum industry conference held late last week.

Section 232 tariffs are at the discretion of the US executive branch and are allowed for reasons of national security. Current tariffs are 10% on aluminum imports. These tariffs were meant to reduce the flow of metals imports, thereby preventing foreign exporters from dumping cheap aluminum onto the US market. AEGIS notes the cost of the tariffs has supported the MWP. Reducing or eliminating those tariffs would likely reduce costs and perhaps prices in the U.S, as these tariffs are based on aluminum prices, and are built into the MWP.

The CME Midwest Premium is a premium that midwestern US buyers pay on top of the LME price and can be hedged via swaps. However, the CME Midwest Premium swap market is thinly traded, and there is no options market. Hedging in this market is tricky, so we recommend using limit orders. Please contact AEGIS for specific strategies that fit your operations. (10/3/2022)

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Price Indications

Today's Charts

AEGIS Insights

9/28/2022: AEGIS Factor Matrices: Most important variables affecting metals prices

8/31/2022: Will Chilean Production Issues Drive Copper Prices Higher?

8/24/2022: Chinese Aluminum Supply Issues Could Rally Prices

8/16/2022: Zinc Prices Are On The Rebound Due To Supply Issues

8/9/2022: Aluminum prices are finding support: Consumers can lock in lower costs in 2023 and beyond

9/30/2022: EU edges towards more sanctions on Russia

9/29/2022: LME to discuss banning Russian metal, sources say

9/28/2022: Nippon Steel says India JV with ArcelorMittal to spend $5 bln to boost capacity

9/27/2022: Hydro responds to reduced aluminium demand, partially curtails production

9/26/2022: NorthAm auto cut estimates continue to rise

9/26/2022: Grim demand outlook pushes copper prices to 2-month low

9/25/2022: Chinese copper trader Maike will sell assets and restructure, Financial Times reports

9/25/2022: China’s Maike Metals will sell assets and restructure, says chair

9/23/2022: China's manufacturing steel demand rebounds in August, further improvement to be modest

9/23/2022: Steel makers fear deepening crisis from energy crunch as output halted

Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Certain information in this presentation may constitute forward-looking statements, which can be identified by the use of forward-looking terminology such as “edge,” “advantage,” “opportunity,” “believe” or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities.