“We have been shipping indium into the US because of the threat of duties,” one trader told Metal Bulletin. “We sell a lot of indium in the US, and almost all of it comes from China.”

The US first imposed sweeping tariffs under Section 232 on $60 billion of Chinese products in March, including 25% on steel and 10% on aluminium. Three months later it imposed a 25% tariff on a further $50 billion worth of Chinese imports, and then on August 7 unveiled a list of $16 billion worth of Chinese imports to be hit with another 25% tariff. Throughout this process, China has resolutely met each tariff with one of its own against imports of US goods.

Minor metals participants had been confident that their markets would not come under the shadow of the sanctions due to the importance of imports to the US in those markets.

“It would not be wise for the US to put tariffs on Chinese indium,” a second trader said. “Indium production is wholly dominated by China.”

But the Trump administration has pushed forward with tariffs despite such concerns before. The US imports more than 80% of its aluminium demands, and around 15% of that comes from China. The US’s biggest aluminium importer is Canada with more than a third of imports, but that did not stop Trump adding Canada to the tariffed regions under Section 232 in June.

“The minor metals markets are much more volatile and less transparent than the base metal markets. It is very difficult to know what will happen,” a third trader said.

The uncertainty is adding to the current seasonal malaise in minor metals markets, and the propensity of states to make these trade announcements very quickly is not helping market participants find clarity.

“We’re expecting some concrete information [on potential duties on minor metals imports] in September, but the goalposts keep getting moved,” a third trader said.

One thing that is certain is that any trade action against minor metal imports into the US will lead to higher prices, because volumes being moved into the US will be quickly depleted if tariffs are applied to their replacement units.

“One way or another, once the metal on the ground is used up, new imports will have to be found and prices will go up,” the first trader said. “The US has to import, and the higher costs will only ever be passed on to customers.” 

European indium prices have been stable throughout the summer on a lack of spot business, holding at $275-300 per kg on Wednesday August 22. But there is a growing discrepancy between Chinese prices that have trended downward in recent weeks to the equivalent of about $250, and US prices that have maintained at higher levels, in some cases above $300.