SHANGHAI: London aluminium traded in a tight range near its three-week high on Tuesday as investors weighed risks of a major global trade war after US President Donald Trump imposed fresh tariffs on all steel and aluminium imports.
Three-month aluminium on the London Metal Exchange (LME) was flat at $2,657.5 a metric ton as of 0330 GMT, hovering near the three-week high of $2,662.50 hit on Monday.
Trump substantially raised tariffs on steel and aluminium imports to 25% “without exceptions or exemptions” in a move to aid the struggling industries.
However, he agreed to consider exempting Australia from the tariffs following a phone call with Prime Minister Anthony Albanese, noting that Australia was one of the few countries with which the US had a trade surplus.
“We expect any tariff will lead to higher prices for US manufacturers. This would most likely be in the form of higher US Midwest premiums rather than a sustained uplift in the LME price,” ANZ Research said.
The US is highly dependent on imported aluminium, mostly from Canada.
Prices of primary aluminium in the US are based on the LME benchmark plus the Midwest premium, which has been elevated in recent months and was last up 10% to $0.305 a lb - highest since July 2022.
The tariffs will also shift trade patterns, with more Canadian aluminium going to Europe and the US increasing purchases from the Middle East, ANZ Research added.
London aluminium stuck in tight range amid US tariff worries
LME benchmark copper fell 0.4% to $9,409, zinc dipped 0.1% to $2,843, tin eased 0.5% to $31,000, lead slipped 0.3% to $1,994 and nickel fell 0.5% at $15,440.
The aluminium contract on the Shanghai Futures Exchange (SHFE) rose 1.0% to 20,700 yuan ($2,832.74) a ton, the highest since early December 2024.
SHFE copper dipped 0.3% to 77,200 yuan, nickel lost 1.7% to 124,820 yuan, zinc slid 0.5% to 23,740 yuan, lead shed 0.1% to 17,155 yuan and tin dipped 0.8% to 257,250 yuan.
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