SHANGHAI- London aluminum was rangebound near its three-week high on Tuesday as investors weighed risks of a major global trade war after US President Donald Trump imposed new 25 percent tariffs on all steel and aluminum imports.
Three-month aluminum on the London Metal Exchange (LME) edged down 0.3 percent to $2,650.50 a metric ton, hovering near its three-week high of $2,662.50 hit on Monday.
Trump substantially raised tariffs on steel and aluminum imports on Monday to a flat 25 percent “without exceptions or exemptions” in a move to aid the struggling industries.
Later, however, he agreed to consider exempting Australia from the tariffs, noting that Australia was one of the few countries with which the US had a trade surplus, following a phone call with Prime Minister Anthony Albanese.
“We expect any tariff will lead to higher prices for US manufacturers. This would most likely be in form of higher US Midwest premiums rather than a sustained uplift in the LME price,” ANZ Research said in a note.
The US is highly dependent on imported aluminum, mostly from Canada. Prices of primary aluminum 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 percent to $0.305 a lb, its highest since July 2022.
The tariffs will also shift trade patterns, with more Canadian aluminum going to Europe and the US increasing purchases from the Middle East, ANZ Research added.
LME benchmark copper fell 0.4 percent to $9,412, zinc dipped 0.1 percent to $2,842, tin was down 0.3 percent to $31,055, lead slipped 0.2 percent to $1,996, and nickel was down 0.2 percent at $15,495.
The aluminum contract on the Shanghai Futures Exchange (SHFE) rose 0.7 percent to 20,655 yuan ($2,826.59) a ton, its highest level since early December 2024.
SHFE copper dipped 0.2 percent to 77,220 yuan, nickel lost 1.7 percent to 124,810 yuan, zinc slid 0.5 percent to 23,735 yuan, lead gained 0.1 percent to 17,185 yuan and tin was down 1 percent to 256,670 yuan.
