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The Mexican aluminium industry is defending its attempts to forge a deal with the US. At the same time, it is withdrawing from relations with China, sector participants said during the AluMexico event organized by Mexican aluminium institute IMEDAL and held in Monterrey, September 9-11.“We have to convince the US of the importance of Mexico [as a trading partner]. We should try a deal with them [despite the US’ imposition of tariffs],” Eugenio Clariond Rangel, president of IMEDAL and executive president of aluminium supplier Cuprum, said in a panel during the conference.
Warning that Mexico may develop an anti-Asia stance, principally in regard to China, he said: “We cannot give up. We have to strengthen North America.”
Rangel said that it might be wise to create a trilateral body that involves Mexico, the US and Canada. This would strengthen North America as a bloc and help negotiate an exemption from US tariffs. “We have a long and complex path in front of us… We will not have a solution this year,” he added.
According to the governor of the Mexican state of Nuevo Léon, Samuel García, this was an uncertain time for Mexico. “It’s North America against China,” he told the conference.
For Sergio Gómez, from IQOM Commercial Intelligence, negotiations with the US will depend on the way Mexico deals with China. “We have to make the US aware that the enemy is on the other side, not in North America,” he said.
“The Mexican aluminium industry does not have any alternative but to ally with the US,” a producer source told Fastmarkets. “It’s our only market.”
Another topic discussed in the conference was the fact that scrap prices are rising in Mexico. This is because Mexican scrap is being redirected to the US. Under the pre-existing US-Mexico-Canada trade agreement (USMCA), it was not subject to tariffs.
Consequently, the domestic market in Mexico was using more P1020 material than scrap in secondary production.
“Limiting scrap exports to the US would be beneficial,” Rangel said. “We are considering whether to restrict scrap exports – taxing or banning them. But first, we want to maintain a constructive dialogue to see if we can reach an agreement with the US. Retaliation will not be taken in the medium term. However, it’s a possibility if relations with the US [do not] improve.”
Partly in response to the separation of the markets, Fastmarkets launched a suite of non-ferrous scrap and alloy price assessments to serve the Mexican domestic markets on June 2.
Rangel proposed to the conference a system to monitor the sources of aluminium that enters Mexico. He did not give details on how this would be implemented.
On September 11, Mexico announced that it intended to impose tariffs on around 1,400 imported products, including aluminium, from countries with which it does not have a trade agreement. This would be a move that industry sources said would signal alignment with the US.
The proposed tariffs would be in the range of 10-50%. They would target mostly Asian countries, according to several news reports. Chinese cars were also expected to receive a 50% tariff in 2026.
China redirected much of its aluminium exports to Mexico after US President Donald Trump, in his first term in government, removed tariffs on the North American country in 2017. Some of the metal is processed in Mexico before being exported to the US. Fastmarkets had expected that this trade would shrink with the new tariff on Mexican imports.
“It makes no sense to add tariffs to products not produced domestically, such as primary aluminium and billets. This only increases costs and undermines the competitiveness of Mexican industry,” a producer source told Fastmarkets.
“This kind of news causes volatility in the market,” a seller source said. “Whoever has metal in Mexico, and is not under tariffs now, will think twice before taking it out of there because the prices might go up. So, companies that have material in Mexico now are cautious about selling. Until the [Mexican national] congress approves the measure, there’s a lot of uncertainty about what will happen.”
In May last year, Mexico imposed tariffs on aluminium imports, which affected the light metal’s supply chain, trade flows, and premiums.
A few days later, the Mexican government decided to partially withdraw the new import tariffs. The decree highlighted that there was no national production of primary aluminium. Additionally, availability in countries with which Mexico has free trade agreements would be insufficient to satisfy supply for the automotive industry, electronics, and others.
The majority of market participants who spoke to Fastmarkets said that this time the tariffs might be more durable.
“The topic came up again after a meeting between the Mexican president’s team and US Secretary of State Marco Rubio. This occurrence would make a reversal more unlikely,” a producer source said.
The Mexican aluminium market is experiencing low spot activity and pricing pressure amid continuing tariff uncertainty and heavy reliance on US trade. Market participants are watching closely for potential trade deals that could reshape the trading landscape.
“Companies are slowing [their operations] in Mexico at the moment. We have an automaker client reducing its presence in Mexico. They will focus on building plants in the US because of the tariffs,” a producer source said.
In March, Fastmarkets launched a package of assessments of imported primary aluminium premiums for Mexico.
The fortnightly aluminium 6063 extrusion billet premium, cif Mexico, was most recently assessed at $370-420 per tonne on September 9, unchanged from August 26, when it had dropped by 4.82% from $380-450 per tonne.
The aluminium P1020A premium, cif Mexico, was assessed at $300-340 per tonne on the same day. This represents a fall of 5.88% from $320-360 per tonne on August 26.
And the monthly aluminium low-carbon differential P1020A, cif Mexico, was assessed at $0-38 per tonne on August 26. This was unchanged from July 29, when it had increased by 1.33% from $0.00-37.50 per tonne.
On March 12, a 25% tariff on all steel and aluminium imports into the US went into effect. This reinstated the previous US Section 232 tariff, a month after Trump signed an executive order on the subject.
On May 30, Trump announced plans to raise the Section 232 tariff to 50% from 25%.
And on June 4, 50% tariffs for steel and aluminium were implemented. Consequently, Mexico is currently subject to 50% Section 232 tariffs on steel and aluminium imports into the US.
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