Emirates Global Reports Surge in Aluminum Sales to US Amid Tightening Market Conditions

Emirates Global Aluminium (EGA) Boosts US Shipments Amid Tariffs

Key Highlights:

• EGA, the top aluminum producer in the UAE, is increasing shipments to the US despite stiff tariffs.
• Growing shortages in the US have driven American prices to levels that offset the levies, making it profitable for overseas producers to ship to the US.

Market Analysis:

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The US demand for aluminum remains strong, driven by its use in cans, cars, and cabling. However, the Trump administration's doubling of tariffs on aluminum imports to 50% in 2022 led to a diversion of supplies from the US market. As a result, American manufacturers have been forced to bid up prices to secure alternative supplies.

Premiums Surge:

US buyers are paying additional charges to get cargoes delivered to their plants, with premiums now exceeding 50% of the London Metal Exchange (LME) price. This has created an opportunity for overseas producers like EGA to turn a profit by shipping to the US.

EGA's Strategy:

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EGA has redirected some volumes from Europe to the US to capitalize on the strong demand and high premiums. The company has a metal recycling facility in the US, which has also benefited from the US Midwest premium. EGA is expanding its recycling facility in Minnesota and building a new 750,000 ton smelter in Oklahoma.

Market Outlook:

EGA's Chief Financial Officer, Pal Kildemo, expects the demand for aluminum to remain strong this year, driven by the use of aluminum in construction and manufacturing. Additionally, there is scope for new demand as some buyers begin switching to aluminum from copper. However, the market may face under-supply in the future as China approaches its production capacity limit.