Key facts
- The U.S. Midwest aluminum premium is currently $1.09 per lb, or $2,403 per metric ton.
- The premium eased from a record $1.19 in June on hopes of tariff reduction.
- Alcoa's CFO Molly Beerman stated that the U.S. needs to import approximately 4 million tons of aluminum annually.
- Canada can supply about 3 million tons of that annual U.S. import need.
- Alcoa produces around 900,000 tons of aluminum annually in Canada.
- Alcoa's order book is nearly sold out for the remainder of 2026.
The U.S. Midwest aluminum premium, a key price component for physical aluminum in North America, will likely not decrease significantly even if Washington halves tariffs on Canadian imports, according to Alcoa's finance chief. The premium, currently at $1.09 per pound ($2,403 per metric ton), has eased from its June record of $1.19 per pound amid hopes for tariff relief.
Alcoa Chief Financial Officer Molly Beerman explained at the Jefferies Global Industrials Conference that the U.S. requires about 4 million tons of aluminum annually, with Canada able to supply only 3 million tons. This deficit means the U.S. still needs to incentivize imports of an additional million tons, even with a favorable tariff rate from Canada. "We don't see Midwest dropping significantly," Beerman said, adding that a return to pre-tariff levels is unlikely.
However, Beerman noted that if tariff relief or waivers are extended to other trade partners such as Japan, South Korea, or Europe, covering the remaining 1 million tons, the Midwest premium could reduce. Alcoa pays over $1 billion annually in tariffs on its Canadian aluminum exports to the U.S., but Beerman stated that the Midwest premium fully compensates the company for these costs and provides additional margin due to tight supply.
With aluminum supplies from the Middle East constrained by conflict, North American and European customers are actively seeking Alcoa's supply, leading to an order book that is almost completely sold out for the rest of 2026.