Canada-to-Europe aluminum shift

Canadian aluminum that long moved south is now moving across the Atlantic, leaving some United States buyers with a tighter spot market and longer replacement times. (whitehouse.gov) The tariff shock started in 2025. The White House imposed a 25 percent tariff on aluminum imports on February 10, 2025, then raised the rate to 50 percent in a June 3, 2025 proclamation. (whitehouse.gov) Canada is the United States’ main foreign source of primary aluminum, and the two markets are deeply linked. A C.D. Howe Institute paper said Canada supplies more than half of the aluminum available in the United States, or about 2.8 million tonnes a year of raw metal. (cdhowe.org) The first signs of diversion showed up in Canada’s own trade data. Statistics Canada said monthly aluminum exports to the United States fell from 1.36 billion Canadian dollars in March 2025 to 604 million Canadian dollars in June 2025, while exports to countries other than the United States rose from 41 million Canadian dollars to 255 million Canadian dollars over the same stretch. (statcan.gc.ca) By the second quarter of 2025, the shift was visible in Quebec, which accounts for about 90 percent of Canada’s aluminum-making capacity. Bloomberg, citing S&P Global Market Intelligence, reported that the United States’ share of Quebec aluminum exports fell to 78 percent from 95 percent in the first quarter, while Europe’s share rose to 18 percent from 0.2 percent. (bloomberg.com) Europe had its own reason to pull in replacement metal. The European Commission’s 16th sanctions package, adopted on February 24, 2025, added a ban on imports of primary aluminum from Russia, with a 275,000-ton quota during a 12-month transition period. (ec.europa.eu) That created a second destination for Canadian smelters at the same time the United States became more expensive to serve. S&P Global reported that 326,562 metric tons of Canadian P1020 aluminum arrived in Rotterdam from January through November 2025, and traders said Canadian units were still landing in Europe in early February 2026. (spglobal.com) The immediate pressure point for United States buyers is not headline benchmark prices but physical availability. S&P Global said United States primary aluminum warehouse stocks had fallen to about 150,000 to 175,000 metric tons by late January 2026, down from about 200,000 metric tons in late December 2025, while the spot Midwest premium hit 103.95 cents a pound on February 3. (spglobal.com) Producers have described the rerouting as a commercial response, not a permanent break. Alcoa said it diverted about 100,000 metric tons of Canadian shipments away from the United States to other destinations such as Europe, and Aluminerie Alouette said 57 percent of its production went to Europe in the second quarter of 2025, up from 4 percent in the first quarter. (bloomberg.com) The trade can still swing back if United States premiums rise enough to cover the tariff and the price risk. But as of early 2026, traders told S&P Global that tariff volatility and low inventories were keeping buyers on a hand-to-mouth footing, with Canada-to-Europe flows still part of the market. (spglobal.com)