The Aluminum Monthly Metals Index (MMI) increased 3.83% from October to November.

The Aluminum Monthly Metals Index (MMI) increased 3.83% from October to November.

Aluminum Prices Rise Throughout October

Both aluminum prices and the Midwest Premium proved decidedly bullish throughout October. By November 3, LME prices reached an over three-year high at $2,907 per metric ton. Soon after, prices appeared to stagger, drifting beneath the $2,900 per metric ton mark. Following a 12% increase during October, Midwest Premium prices hit $0.88 per pound as of November 12. This marks a staggering 245% rise since the start of the year.

Service Center Q3 Results Suggest Sideways Market

Despite the ongoing bullishness of the Midwest Premium, the U.S. market remains sideways compared to its position last year. Quarterly financial results from Reliance showed aluminum shipments increased by a mere 0.25% during Q3. Quarter over quarter, shipments slipped 4.06%. Meanwhile, Ryerson experienced a 2.27% year-over-year rise, but a 10% quarter-over-quarter decline.

It is worth noting that demand conditions in 2024 proved somewhat lackluster compared to prior years, so the modest rise in shipments hardly suggests a strong market. That said, sources have noted that demand appears somewhat steady despite the significant increase in aluminum prices. Finally, data indicates that tariffs have yet to meaningfully drag domestic consumption levels.

How Far Will the MW Premium Rise?

The recent uptick in the Midwest Premium came as a surprise to certain service center sources, considering there was no evidence of a manufacturing rebound. Even with the bevvy of data center projects set for construction in 2026, the U.S. market overall continues to face headwinds.

Source: MetalMiner Insights, Chart & Correlation Analysis Tool

Nonetheless, the premium now sits noticeably higher than previous estimates of where it needed to peak to price in the cost of tariffs, which was projected in the mid-$0.70/lb range. Alcoa’s recent quarterly report stated, “At recent Midwest premium pricing, tariff costs on U.S. imports of aluminum from Canada are fully covered by the Midwest premium.” This helps to explain why the premium’s three-month futures contract remains at a noticeable discount to spot prices. For their part, investors remain wary of further legs upward.

Novelis Works to Reopen Oswego as ADI Ramps Up

While the premium had fully priced in tariffs by the end of Q3, the September fire at Novelis’ Oswego facility added another lift. That facility is responsible for 40% of the aluminum sheet supply to automakers, and the ongoing outage has significantly tightened the market, resulting in lengthening lead times.

Novelis offered some optimism following the disruption as it detailed plans to restart the plant by the end of December. Assuming there are no further delays, this will likely prove a headwind for the Midwest Premium.

Meanwhile, Aluminum Dynamics continues to ramp up operations. According to sources, ADI is reportedly planning to target capacity toward automotive sheet and canned products. ADI is likely looking to capitalize on the current outage at Oswego and take some of the market share away from Novelis.

Canada Trade Deal Delayed, Not Over

Meanwhile, markets remain attentive to ongoing negotiations with Canada. A trade deal appeared all but confirmed in early October, before President Trump withdrew from negotiations over a dispute.

The deal would have posed a considerable downside risk to the premium had it included a quota arrangement for aluminum, as any market participants suspected it would, because Canada remains a leading supplier to the U.S. The situation differs from the steel market, which had spare capacity to accommodate a slowdown in imports and was able to attract new investments in the wake of tariffs.

The aluminum market, particularly as it relates to primary aluminum, did not. This explains why U.S. steel prices found a peak and subsequently declined, but the Midwest Premium continued to climb. Meanwhile, Canada remains well-positioned to meet U.S. primary requirements.

Despite the setback, a deal remains possible. U.S. Ambassador Pete Hoekstra told reporters that while “Canada burnt bridges with America…Donald Trump did not slam the door.” Although it may not be finalized until next year, the likely deal will inevitably challenge the current levels of the Midwest Premium.

What’s Next for Exchange Prices?

While tariffs are the primary culprit for the rise of the Midwest Premium, LME aluminum prices increased for other reasons. For instance, supply concerns have helped feed bullish sentiment over recent months. China has also reached its government-imposed capacity limit, meaning global aluminum supply is no longer expected to experience the same growth seen in years past. Additionally, intermittent curbs and slower-than-expected restarts tied to power availability (particularly in hydropower-sensitive regions in China) have tightened primary metal supply growth. Market commentary has consistently flagged a 2025 market deficit risk as a result.

Meanwhile, recent rate cuts by the Federal Reserve provided a modest tailwind to the market, offering broad-based strength across base metals and improving both investment flows into industrial metals and optimism about improvements in end-use sectors.

Investment funds, whose large positions offer strong influence over prices, also added significant momentum to markets, piling on long bets to their highest level in years. Fund position showed a modest pullback in long positions over the last week, while short positions began to creep higher, perhaps suggesting their sentiment may be on the verge of a shift. Globally, the market remains well-supplied, and while demand conditions appear somewhat stable, they have yet to mount a strong rebound

A shift in sentiment among funds would be enough to dismantle the current price trajectory. Ahead of aluminum, copper prices witnessed a downside correction. This could prove to be a leading indicator for aluminum prices, signaling that the recent uptrend among base metals may be on the verge of exhaustion.

Biggest Aluminum Price Moves

• LME aluminum prices jumped 6.27% to $2,846 per metric ton as of November 1.
• Indian primary cash aluminum prices rose 4.65% to $3.05 per kilogram.
• Chinese primary cash aluminum prices increased 2.91% to $2,910 per metric ton.
• Meanwhile, the premium for 3003 over 1050 Korean aluminum coil prices slid 0.82% to $3.95 per kilogram.
• Korean commercial 1050 sheet prices witnessed a modest 0.82% to $3.92 per kilogram.