US tariff cut on Canadian aluminum won’t lower Midwest Premium by much: Alcoa

Reducing the US 50% tariff on Canadian primary aluminum will not significantly reduce the US Aluminum Midwest Premium, according to Molly Beerman, CFO of aluminum giant Alcoa.

Trade talks between the US and Canada in late August came close to an agreement that would have reduced US 50% tariffs on Canadian aluminum to 25%, but collapsed on Aug. 21. The failed negotiations have led to retaliatory tariffs between the two nations on metals and other goods. The US is heavily reliant on imports of primary aluminum from Canada, but Alcoa does not expect sky-high US aluminum prices to be reduced by much if a preferential rate were given to Canada.

"Even if we were to have a favorable rate with Canada, we don't see the Midwest [Premium] dropping significantly," Beerman said Sept. 10 at the Jeffries Global Industrials Conference. "It might come off a little bit, but we wouldn't see it returning to pre-tariff levels."

Platts assessed the spot 99.7% P1020 US Aluminum Transaction Premium at $1.097/pound plus LME cash, delivered Midwest, net 30-day payment terms, on Sept. 10. Platts is part of S&P Global Energy.

The assessment, known as the Midwest Premium, is over four times higher than it was at the start of 2025, primarily due to US 50% tariffs on aluminum and the war in the Middle East.

"The US needs to import 4 million metric tons of supply," Beerman said. "Canada only has the possibility to supply about 3 million of that. If additional trade partners get tariff relief or waivers and the last 1 million metric tons is covered, then you can expect the Midwest Premium to reduce in response."

Canada accounted for 60.5% of US primary aluminum imports in 2025, according to S&P Global Market Intelligence's Global Trade Atlas.

Strong demand

Despite volatile trade dynamics and historically high price levels, Beerman said Alcoa has been experiencing strong aluminum demand in both North America and Europe.

"Packaging is very strong in both markets," she said. "Really high demand there, lots of slab volumes going out in both regions to packaging customers. Very strong on [aluminum] rod since that's part of the electrical infrastructure build-out. We're completely sold out on rod."

Beerman added that the only weak market segment Alcoa has seen is the aluminum billet market in Europe due to challenges from the Middle East war.

Alcoa has been capitalizing on high global aluminum prices by boosting output, she said.

"We had a very strong second quarter, really took advantage of the high prices and getting those to the bottom line," Berman said. "We brought about 30,000 mt of smelting capacity back online. We had ramp-ups at our San Ciprian smelter in Spain, Alumar in Brazil, Lista in Norway and Portland in Australia."