Aluminum Tariffs :Rio Tinto (NYSE:RIO) is buying aluminum in the U.S. and reselling it to American customers rather than moving its own metal from Canada, as it is now cheaper due to President Trump’s 50% tariff on aluminum imports, Bloomberg reported Thursday.
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Aluminum Tariffs
The tariff, which took effect in June, has forced Rio (NYSE:RIO) to reduce shipments to the U.S. and instead buy supplies from rivals, as long as those supplies are already in the country, the report said.
The tariff has roiled North America’s highly integrated metals market, while pushing aluminum prices (LMAHDS03:COM) well above other international markets since January due to the tariff threat, with the Midwest premium jumping 81% since early June.
Rio (RIO), which runs a refinery and five smelters in Quebec, reportedly has bought at least 50K tons of aluminum from the U.S. spot market since June, while it shipped 723K tons of aluminum to the U.S. in H1, most of it passing before the 50% levies took effect.
Rio (RIO) has said the tariffs on its Canadian-made aluminum resulted in gross costs of $321M in this year’s H1; Alcoa (NYSE:AA), the largest U.S. producer, said in July that U.S. tariffs on Canadian shipments in H1 took a $135M bite out of the company’s profits.
Canada is the biggest foreign supplier of aluminum to the U.S., accounting for 53% of imports of the metal in the past 12 months.
Other potentially relevant stocks include Century Aluminum (CENX) and Kaiser Aluminum (KALU).
Source – Bloomberg