Global Trade
February 10, 2026
US imports not responding to premium incentives
Written by Greg Wittbecker
January imports of unwrought aluminum were 245,972 metric tons, down 7.6% from December. January’s numbers are also a drop compared to 336,389 tons in January 2025, according to the US International Trade Administration.
Canadian imports were 144,009 tons compared to 169,781 tons in December and 248,125 tons in January 2025. Month on month, that’s a whopping 15.2% decline.
So far, Canadian producers or traders holding prepaid Canadian inventories held in Canadian have not responded to the big move in Midwest premiums. Since Dec. 31, premiums have moved from $0.91 cents over LME to $1.03. However, it has not triggered an increase from Canada.
Some seaborne importers have gotten the message. The UAE imported 41,668 tons in January, up 22.1% from December. India shipped 18,612 tons versus 7,040 tons in December. Qatar imports rose from 4,673 tons to 7,077 tons. South African tons climbed from 4,472 tons to 5,129 tons.
However, some of the traditionally largest seaborne importers have not reacted. Bahrain, which is the fourth ranking importer, had a 27% decrease in its imports to 9,432 tons compared to 12,808 tons in December. Argentina, the fifth ranked importer, slipped from 21,459 tons to just 9,797 tons.
Why aren’t imports rising faster?
At current LME and duty unpaid replacement CIF US port, we estimate duty paid replacement into the Midwest is around $0.92-$0.93 per pound. That means a clear $0.10 per pound incremental margin versus published premiums. Why are we not seeing the imports flowing in?
Several thoughts on this:
Canadian producers may not have substantial discretionary P1020 tons to supply to the US. Canada has clearly prioritized building sales to the European duty paid market and may have previously committed more volume there. It may take 2-3 months to free up supply.
Canadian producers always emphasize selling value-adding products to the US which they index to Midwest. They are earning the prevailing premium on those sales and clearly will want to sell all they can, earning the $1.03 P1020 indexed premium plus their upcharges for the products. This is especially lucrative now in wire rod and to a lesser extent in billet and foundry.
Traders holding Canadian units may be measured in pushing this metal into the spot market for fear of taking the momentum out of this premium.
Seaborne producers may have issues with discretionary supply for the US. The Midwest premium did not begin to fully cover Section 232 duty costs until November. At that point, production plans were likely already made for December-January shipment, even February. Clearly, some producers were able to react, but not all. Expect to see more seaborne imports come March-May as the netbacks allowed discretionary tons to be redirected here.
Why it matters
Midwest premiums are white-hot. And everyone is asking, “Where’s the metal?” The answer is it takes time to redirect supply. We won’t see the effect of the current spot premium for another 1-2 months. It will likely be the second quarter before we see total imports return to the robust levels of Q1’25, when total imports were 1.07 million tons.
The US needs net imports of around 340,000 tons to balance its primary consumption. We last saw imports high in March at 438,000 tons. Only when we cross that threshold of imports will the market stop draining remaining inventories and relieve the upward pressure on premiums.
