Aluminum futures in the UK fell to $3,050 per tonne, extending the retreat from the three-year high of $3,270 reached on January 28th, after reports that the United States is set to reduce tariffs on the metal. The Trump administration had planned to scale back aluminum duties, which were doubled to 50% last year, in an effort to ease persistent cost pressures for manufacturers. The anticipated tariff cut was expected to improve near-term metal inflows into the US, prompting traders to release inventories from LME warehouses.
Despite the pullback, aluminum prices remained higher on a yearly basis, supported by ongoing supply risks. In China, production is projected to plateau after the country’s major smelters reached their 45-million-ton output cap last year. Efforts by Chinese producers to develop alternative smelting capacity in Indonesia have continued to face setbacks due to elevated energy costs and regulatory uncertainties. At the same time, high power prices, equipment failures, and challenges in securing bauxite have led to production suspensions at key smelters in other producing nations, including Iceland, Mozambique, and Australia.
