North American aluminum leaders eyeing substitution trends amid record prices

Record-high US aluminum prices fueled by US tariffs have sparked concerns about North American industry swapping out aluminum for more affordable materials, industry leaders said on Feb. 2 at the S&P Global Aluminum Symposium.

US President Donald Trump implemented 50% tariffs on all aluminum imports on June 4, fueling a record-shattering price surge for aluminum in the US. The US Midwest aluminum premium has more than quadrupled since Trump took office, as import volumes to the US dwindled throughout 2025. Although North American aluminum demand has been relatively resilient to the sharp price increases, concerns are starting to brew among industry leaders about possible substitution trends.

"There's people in this room that are concerned about the aluminum price relative to other commodities," Timna Tanners, managing director of metals and mining equity research for Wells Fargo, said on a panel. "If you have a choice between an aluminum can and plastic [containers], it's an eight-cent per can [cost increase], and you're talking about a 12 pack, it does add up."

Platts, part of S&P Global Energy, assessed the spot 99.7% P1020 US Aluminum Transaction Premium at $1.04 cents/pound plus LME cash, delivered Midwest, net 30-day payment terms, on Feb. 2.

"We've already heard some reports of Audi in Europe switching, and European aluminum prices, of course, are not what they are here," Tanners added. "Jeep doors are also switching to steel ... So I wouldn't say the [substitution] concern is immaterial."

Other speakers shared concerns about consumers choosing other materials, but emphasized that significant substitution would take multiple years to take hold.

"I think having such high prices for a long period of time will read in potential substitution," Jake Skelton, CEO of Emirates Global Aluminium Americas, said on a panel. "However, I think for substitution to take place, you're talking two to three years before you see that go through, specifically in the automotive [market]. You see that a little bit slower to move."

The US automotive sector, in particular, has been struggling with tight supply and record prices following major fires that led to the shutdown of the Novelis Oswego aluminum plant.

The plant historically supplies about 40% of the automotive sheet consumed by US carmakers. The loss of supply from the plant opened the door for US steel giant Cleveland-Cliffs to begin supplying automakers with steel substitutes.

But despite the supply chain and cost challenges in the US auto sector, aluminum giant Rio Tinto still has a positive outlook for the industry.

"I think the long-term demand prospect for aluminum remains extremely good," Pierre-Charles Forest, general manager of Atlantic aluminum sales and trading for Rio Tinto, said at the conference. "What we can see, I think, more than substitution is possibly a slower penetration rate of aluminum in automotive, and automotive is 50% of our aluminum demand."

Forest emphasized that aluminum has significant structural advantages compared to steel in the automotive sector.

"Of course, it's lighter weight, so there's less gas consumption," Forest added. "Aluminum also reduces vibration because it has a higher volume-to-weight ratio than steel."

Conference speakers also discussed possible substitution opportunities for aluminum due to surging copper prices.

"The other topic is that aluminum can replace copper," said Tanners. "There was an HVAC company last week talking about how they're actively replacing copper with aluminum. We hear that's also happening in China. That's actually an opportunity that was pegged as much as 800,000 tons per year."

Tanners said copper markets are very tight at the moment, especially with the loss in operations of Freeport-McMoRan's major Grasberg mine in Indonesia.

"I do think the aluminum market needs to take a look at the copper dynamic to get some direction," Tanners added.

Platts assessed the copper transaction delivered US Midwest at $5.86/lb on Feb. 2. The price has climbed 32.6% year over year, driven by US tariffs and tight supply.