Century Aluminum sees United States President Joe Biden’s reinstatement of Section 232 tariffs on the United Arab Emirates (UAE) as a signal of his support for the tariff program implemented by his predecessor, an interpretation shared by many in the US aluminium market.
US aluminium market participants previously indicated that they expected Section 232 to remain in place after Biden reinstated the tariffs against the UAE. The bullish sentiment stemming from those expectations sent the US Midwest aluminium premium up after nearly two months if inactivity.
Fastmarkets assessed the aluminium P1020A premium, ddp Midwest US at 16-17 cents per lb on February 19, unchanged week on week but up by 6.45% from 15-16 cents per lb on February 5 - a level it had maintained since mid-December.
Bless was also encouraged by Biden’s push to support domestic industry.
“One of President Biden’s principal platforms, as you know, is the urgent requirement to build back US strength in manufacturing,” he said.
Much of the uncertainty on the tariffs stems from questions on whether Biden will reissue tariffs against Canada. Primary aluminium imports from Canada have been tariff- and quota-free since the start of the year.
US market participants are closely watching import levels of Canadian unwrought, non-alloyed material, even after the quota against the country expired at the end of December. The tariff against Canada was replaced with a quota in late October.
“Canadian imports have averaged around the levels that were established back during the third quarter. As you will recall, these amounts were specifically set to backstop the effectiveness of the Section 232 program. And thus far, we believe it’s generally working, although of course we are watching it very closely,” Bless said.
US imports of unwrought aluminium totaled roughly 80,000 tonnes in December, exceeding that month's quota by about 10,000 tonnes, according to US Census Bureau data released on February 5.
Still, Canada's shipments to the US for September-December 2020 totaled about 293,000 tonnes, 13,000 tonnes less than the cumulative 306,000-tonne quota for the last four months of that year.