Emirates Global Aluminium, the United Arab Emirates’ top producer of the metal, is boosting shipments to the US despite stiff tariffs, as growing shortages drive American prices to levels that offset the levies.
President Donald Trump last year doubled tariffs on aluminum imports to 50%, a move that prompted producers in Canada and elsewhere to divert supplies away from the US market. With US demand for the metal used in cans, cars and cabling holding strong, the shortfalls forced American manufacturers into a bidding war to find alternative supplies.
While global aluminum prices are set on the London Metal Exchange, US buyers pay additional charges to get cargoes delivered to their plants, and those premiums have now surged to more than 50% of the LME price — meaning overseas producers can once more turn a profit by shipping cargoes to the US.
EGA is one company sending more to the US. The Dubai-based firm has a metal recycling facility in the US, and that plant has also benefited from the so-called US Midwest premium.
“We have redirected a bit of volumes from Europe to US because as you may have seen from some of our competitors, there’s more metal flowing from Canada to Europe,” EGA Chief Financial Officer Pal Kildemo said in an interview. “The amount of volume is more or less the same, but it’s changed a bit between the regions based on the movements on the geopolitical side.”
EGA is expanding its recycling facility in Minnesota, as well as another in Germany, though those make up a small portion of sales compared with the primary metals production at its smelters in Dubai and Abu Dhabi. The company is also building a 750,000 ton smelter in Oklahoma.
The producer doesn’t see any sign that US metals tariffs will change this year. A Supreme Court decision last week that struck down some of the Trump administration’s levies doesn’t apply to the tariffs on aluminum, which are subject to sectoral tariffs on national security grounds.
Demand for aluminum is set to remain good this year, Kildemo said. There’s also scope for new demand as some buyers begin switching to aluminum from copper, after prices for that metal rallied.
“The market outlook looks quite constructive,” he said. “Historically, shortfalls in demand have been filled with the construction of facilities in China,” though as China nears a production capacity beyond which it won’t build new smelters, “we could have a fair bit of under-supplied markets going forward,” he said.
