New investment incentives may support US aluminium smelting over time, but the market is likely to remain reliant on imports, keeping Midwest premiums elevated
The Trump administration has amended its Section 232 aluminium tariffs to encourage investment in domestic smelting. Companies that build, expand or refurbish US smelting capacity can apply to import qualifying volumes at a 25% tariff instead of the standard 50% rate, provided they meet approved investment milestones. The shift reflects the limited success of tariffs alone in reviving US primary aluminium production.
US remains structurally short of primary aluminium
US primary aluminium production has continued to decline over the years despite years of tariff protection. The country now has only four operating primary aluminium smelters, down from more than 20 at the turn of the century, leaving the US heavily reliant on imported metal. Canada remains by far the largest supplier of primary aluminium, while the Middle East also plays an important role in meeting US demand.
US primary aluminium production continues to decline
New supply will take years to arrive
Rebuilding domestic smelting capacity will take time. More fundamentally, primary aluminium production is constrained by access to reliable, competitively priced electricity rather than trade policy alone. While tariffs may improve project economics, developing new capacity still requires billions of dollars of investment, long-term power agreements, environmental permitting and several years of construction before additional metal reaches the market. The proposed 750ktpa EGA-Century Aluminum (CENX) greenfield smelter in Oklahoma – the most advanced project in the US pipeline – is unlikely to add meaningful domestic supply before 2030.
US demand remains heavily reliant on imports
US aluminium imports by country in 1H26
Source: US Customs, ING Research
Midwest premiums remain well supported
Recent disruptions in the Middle East have added to pressure on an already tight US market by reducing global availability and increasing competition for alternative supply. However, elevated Midwest premiums primarily reflect the combination of high import tariffs, limited domestic production and continued reliance on overseas metal.
We expect the US Midwest premium to remain well-supported. While the new programme may improve the longer-term outlook for domestic production, it is unlikely to materially reduce import dependence or procurement costs over the next several years.
US Midwest premium to remain elevated
Source: Platts, Fastmarkets, ING Research
Import dependence will persist
The latest changes are unlikely to materially alter the near-term US market. The reduced tariff applies only to qualifying volumes linked to approved investment plans, while meaningful additions to domestic smelting capacity remain years away. As a result, import dependence and elevated US delivery costs are likely to persist.
Ultimately, the programme should be viewed as a long-term industrial policy rather than a near-term solution to the country’s supply shortfall. If successful, it could support a gradual revival of US primary aluminium production. Until meaningful new capacity comes online, however, the US will remain structurally dependent on imports, keeping Midwest premiums well-supported.
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