This morning in metals news, the Aluminum Association expressed its disappointment in the United States-Mexico-Canada Agreement (USMCA), the Pentagon is reviewing the U.S.’s dependence on foreign sources of critical materials (including rare earths from China) and Section 232 steel tariff exemption requests continue to rise.
Section 232 Aluminum Tariff
Not everybody was happy with the recently hailed United States-Mexico-Canada Agreement (the agreed-upon rebrand of the North American Free Trade Agreement, or NAFTA).
The Aluminum Association on Monday expressed its disappointment that the deal did not address the Section 232 aluminum tariff, which continues to apply to both Canada and Mexico.
“The Aluminum Association is disappointed that the Section 232 aluminum tariffs were not addressed as a part of the United States-Mexico-Canada Agreement (USMCA),” Aluminum Association President and CEO Heidi Brock said. “Now is the time for the United States to work with Canada and Mexico to provide a full exemption – without quotas – for aluminum imports from those countries. This should occur as soon as possible, and certainly before the final agreement is signed.”
MetalMiner’s Take: A confluence of factors continue to significantly impact aluminum prices and availability.
In terms of availability, Hydro’s Alunorte alumina refinery in Brazil has halted production due to an environmental dispute with the Brazilian government (alumina is the key raw material used to make aluminum). This sent aluminum prices up by 2% today.
The fact that the newly negotiated USMCA did not address the 232 tariffs on aluminum means the 10% tariffs on Canadian aluminum remain intact, which will also continue to support aluminum prices. Buying organizations are now experiencing a real tightness for semi-finished materials and many must source offshore or via Canada to meet manufacturing production schedules. The sanctions on Rusal also go into full effect Oct. 23.
Pentagon Reviewing Sources of Critical Materials
It’s no secret that the U.S depends on foreign sources for a number of critical materials, including, among others, rare earths from China (used in a wide variety of high-tech applications).
According to a Reuters report, the Pentagon is reviewing the U.S.’s dependence on certain critical materials, with plans to eventually release a report of its findings. In addition, the report indicates China will serve as a primary focus of the review.
Exemptions Continue to Rise
Requests from U.S. firms looking to win exemptions from the U.S.’s 25% steel tariff have continued to pour in, even into October, seemingly far exceeding what the Department of Commerce had initially expected when the process began in June.
According to a MarketWatch report, as of Oct. 1. 35,872 steel tariff exemption requests had been filed, with 5,954 requests having been approved (9,057 decisions have been posted).