NALCO raises concerns over 25% US aluminium tariffs: where will India’s export go next, and how will the market cope with surplus?

Following Donald Trump's firm statement —"No exemptions, no exceptions" on a 25 per cent tariff on imported aluminum and steel on Tuesday, February 11—India’s state-owned National Aluminium Company Limited (NALCO) has come up with valuable insights into the potential impact on global price trends. NALCO emphasised that these tariffs are likely to weigh on global aluminum prices, much like the effects seen in late 2018, 2019, and 2020 after similar trade measures were imposed during Trump’s first term.

After Donald Trump introduced an additional 10 per cent tariff on aluminium and 25 per cent on steel in 2018, the average global aluminium price on London Metal Exchange dropped to $1,931.45 per tonne at the end of the same year, which further decreased in the succeeding years to an average of $1,740.93 in August 2019 and $1,457.15 per tonne in April 2020.

Along with the global prices, India’s domestic aluminium price is also expected to take a hit being the United States’ key trading partner. India exports more than 100 thousand tonnes of aluminium (including primary and downstream products) each year to the United States. From January to November 2024, the country exported 110,397 tonnes of aluminium, recording a year-on-year increase of 9.17 per cent of 101,120 tonnes, according to the International Trade Administration. This surge in volume also drove a rise in year-to-date export value from $338.6 million to $352 million.