Upstream recap: Historic week with 25% US tariffs on aluminium & steel into effect and ceasefire talks between Ukraine & Russia

The global aluminium industry is currently grappling with significant challenges owing to the recently imposed tariffs on aluminium and steel by the United States. While the entire value chain is affected, it is the primary aluminium sector that is most shaken by the fluctuating nature of these tariffs. Donald Trump’s inconsistent approach to tariffs has left the industry puzzled. This week, his back-and-forth announcements—including a declaration to double tariffs on Canada, followed by a sudden reversal—have only added to the confusion.

At the onset of the global tariffs on aluminium and steel, Donald Trump announced a dramatic increase in tariffs on Canadian aluminium imports, raising them from 25 per cent to 50 per cent, effective immediately. However, just hours later, the President backtracked on his decision after Ontario withdrew its 25 per cent surcharge on electricity. Does this suggest that the tariff hike was merely a retaliatory response to Ontario's electricity surcharge? Or did the President reconsider his move due to the market backlash, which saw sharp declines in major indexes following his tariff announcement? To discover the answer, read the full article here.

Following this incident, the most-traded SHFE aluminium 2504 contract opened at RMB 20,880 per tonne, hitting a high of RMB 20,910 per tonne and a low of RMB 20,810 per tonne, before closing at RMB 20,830 per tonne, up RMB 75 per tonne or 0.36 per cent. Similarly, LME aluminium opened at USD 2,685 per tonne, reached a high of USD 2,711 per tonne and a low of USD 2,669 per tonne, and closed at USD 2,704 per tonne, up USD 17.5 per tonne or 0.65 per cent. This price movement suggested significant market volatility caused by US tariff policies on major trading partners. To know more about the effects of tariffs on aluminium prices, click here.

In the meanwhile, before doubling the aluminium tariffs on Canada to 50 per cent – just to retract the decision moments later, S President Donald Trump exempted neighbouring nations Canada and Mexico from tariffs for commodities included in the trade agreement of 2019 — the United States-Mexico-Canada Agreement (USMCA). To know the full story, read the article here.

How have the affected countries reacted to tariffs?

The US aluminium and steel tariffs finally came into effect from March 12, and in response to it, the European Commission launched immediate countermeasures, targeting US imports worth up to EUR 26 billion.

China, the only country subjected to a total of 45 per cent in tariffs, has issued a warning of potential retaliatory measures and emphasized its intention to adopt protectionist policies to safeguard its rights and interests.

The UK Department for Business and Trade (DBT) has also raised concerns of the domestic aluminium industry due to the US tariffs. ALFED members have already reported early signs of market disruption. These include a noticeable slowdown in US orders, apprehension around potential contract losses, and concerns that semi-finished aluminium products destined for the US could be diverted into the UK market. To know more, click here.

Other key highlights of the week

Chinese aluminum smelters are expected to benefit from higher profits due to a decline in alumina prices and a rise in primary aluminum prices. As of March 11, domestic alumina prices dropped to RMB 3,357 per tonne (USD 462.36 per tonne) and are projected to fall further below RMB 3,000 per tonne. Meanwhile, the price of primary aluminum is expected to increase, driven by an anticipated gap between demand and production, which will boost the profitability of Chinese smelters, enabling them to offset tariff losses. To explore the detailed analysis, click here.

Besides Donald Trump’s eccentric decisions about tariffs, China’s fraudulence incident that havocked more than USD 1 billion in losses nationwide businesses has made it to top headlines. The aluminium trade scammer involved in the scam of about tens of thousands of aluminium ingots, numerous state-owned enterprises, private merchants and four central warehouses in China has been sentenced to life imprisonment by a judicial court in the eastern province of Zhejiang.  To know more, read here.

This week EGA revealed its financial and operational results for 2024, showcasing increased revenue and Adjusted EBITDA, driven by higher alumina and hot metal production, cost optimisation, and increased share of value-added product sales. EGA reported that its annual revenue increased by 1.69 per cent in 2024 and Adjusted EBITDA grew by 19.48 per cent. The company’s production of alumina reached a record high, marking a 2.42 per cent increase Y-o-Y, while aluminium output hit a new peak, reflecting a rise of 1.13 per cent. Read the full news to know EGA’s 2024 achievements.

War-ridden Ukraine and Russia are set to begin ceasefire negotiations, ahead of which Russian President Vladimir Putin has laid out three “maximalist demands”- 1) a formal Ukrainian commitment to never join NATO, 2) the recognition of Russian sovereignty over Crimea, and 2) the demilitarisation of eastern Ukraine. This development is already igniting hope for aluminium trade rebound, particularly with the potential lifting of sanctions on Russian aluminium exports. Read the full story here.

AL Circle has launched the 30th edition of its e-Magazine, focusing on the Middle East market. This edition highlights the region's growth in aluminium production, technological innovation, and decarbonisation, featuring insightful interviews and articles from industry leaders who are driving the transformation of the Middle East's aluminum industry into a global model of excellence. To know more about the e-Magazine, click here.