Canada cannot fully supply U.S. aluminium needs, Morgan Stanley says

AnalystCommodity
โดย Investing.com·USCA·Read original
Summary · why it matters

Canada could not fully meet U.S. aluminium import requirements even if it redirected all domestic production south of the border, Morgan Stanley said in a research note examining potential tariff relief. The United States relies on imports for about 80% of its aluminium consumption, with Canada historically its largest foreign supplier. During the first half of 2026, the U.S. imported 1.68 million tonnes, or about 280,000 tonnes per month, while Canada exported 1.16 million tonnes, averaging 192,000 tonnes per month and covering about 68% of U.S. import needs. Canadian production totalled nearly 1.6 million tonnes, equivalent to around 95% of American import requirements, meaning the U.S. would still need metal from other countries if every tonne produced in Canada were redirected there. Morgan Stanley assessed reports that Washington could reduce tariffs on some Canadian aluminium to 25% from 50%, a change that would encourage Canadian producers to send metal to the U.S. instead of Europe, where shipments enter duty-free. Still, the marginal tonne required by American buyers would come from a country facing the 50% tariff, and Morgan Stanley said the U.S. Midwest aluminium premium should continue to reflect that higher duty. The premium has traded about 30% above the implied tariff cost, partly reflecting competition with European buyers for Canadian metal, and reducing Canada's tariff could lower that competition and create modest downside for the Midwest premium. Morgan Stanley estimated that the premium could surrender roughly half its current excess over tariff-based fair value, equal to about 10 to 12 cents per pound. European premiums could receive near-term support if Canadian shipments move back toward the U.S., though recovering Middle Eastern supply may limit that impact. Further American supply could arrive under tariff discounts for companies expanding domestic capacity, with Emirates Global Aluminium and Century Aluminum planning a 750,000-tonne-per-year U.S. smelter.

Impact on stocks 4

Critical Materials & Supply Chain▲ · 3 stocks
Alcoa Corp
AA
± MixedTariffrelevance

Potential tariff reduction on Canadian aluminium could affect Alcoa's U.S. operations and premiums, but impact is mixed.

Century Aluminum Company
CENX
± MixedTariffrelevance

Century Aluminum may face competitive pressures from Canadian imports if tariffs are reduced, but also benefits from higher premiums.

Rio Tinto PLC
RIO
± MixedTariffrelevance

Rio Tinto's Canadian operations could see increased U.S. demand if tariffs are reduced, but European premiums may soften.

Financials▲ · 1 stocks

Theme Impact 1

Off-coverage companies 1

Emirates Global AluminumPrivate± Mixed
relevance

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