Aluminum producers in Quebec are diverting more of the metal used to make cans and car parts to Europe as rising US tariffs make their shipments more expensive for American customers.
The US accounted for 78% of Quebec aluminum exports in the second quarter versus 95% in the first quarter, while Europe’s share rose to 18% from 0.2%, according to S&P Global Market Intelligence.
The data are the latest indication of the disruptive impact of tariffs on the flow of goods in North America’s highly integrated market. US President Donald Trump first reinstated a 25% tariff on aluminum imports in March, then doubled the levy in June.
Sprawling processing plants owned by Rio Tinto Group, Alcoa Corp. and Aluminerie Alouette Inc. mean Quebec represents about 90% of Canada’s aluminum-making capacity, with the US as the province’s natural buyer given the close proximity.
Rio Tinto and Alcoa didn’t immediately respond to requests for shipment data, although Bloomberg reported last month that Rio curbed shipments to the US and instead started buying supplies from rivals and reselling it to American customers since the 50% levy took effect.
Alouette, North America’s largest aluminum smelter which is owned 40% by Rio, confirmed by email that metal being shipped to Europe increased to a 57% from 4% over the same span.
“Shareholders are continuing their efforts to develop new alternatives to mitigate the effects of the current situation and maintain Aluminerie Alouette’s long-term competitiveness,” the company said.
For Canadian producers, Europe has offered a buffer against the loss-making US market over the summer, Jean Simard, head of the Aluminium Association of Canada, told reporters in Montreal Monday.
“It’s an easy call. You ship anything you can to Europe,” he said. “As the price builds up into the US, you can expect metal to come back to the US market.”
Trump’s tariffs have pushed aluminum prices well above global benchmarks. The so-called US Midwest premium – the amount added to global price benchmarks to deliver the metal to that region – jumped 82% since early June.
“The concern is actually that it’s going to be Chinese material being diverted into Europe,” said S&P Global’s nonferrous metals analyst Jason Kaplan. “But in fact, maybe it’s Canadian material.” (By Mathieu Dion)
