The inclusion process, issued through an interim final rule on Wednesday, also eliminates the Section 232 aluminum and steel exclusions process, the Commerce Department said in a statement.

The action follows proclamations by President Donald Trump to establish a mechanism for expanding the scope of steel and aluminum tariffs to cover “derivative” articles that contain steel or aluminum, the department said.

(By Jasper Ward and Ismail Shakil; Editing by Leslie Adler)

Launched in late 2023 by the US Department of Defense, the  is an attempt to counter China’s sweeping control of the critical minerals sector, as Reuters reported last year.

Now, more than 30 mining companies, manufacturers and investors – including auto giant Volkswagen – have joined the Critical Minerals Forum non-profit and will be its first users, according to Rob Strayer, a former US diplomat and the organization’s president.

“Everyone in the critical minerals sector is looking for more price transparency,” said Seth Goldstein, a lithium industry analyst with Morningstar. “Any tool like the CMF that could help would be welcome.”

Other members include copper miner South32, rare earths producer MP Materials and defense contractor RTX. The CMF held its first meeting with members in November. The privatization and CMF’s membership have not previously been reported.

Armed with the AI model, the CMF aims to help manufacturers curb their reliance on China by signing more metal supply deals with Western mines, according to more than two dozen industry consultants, purchasing agents, analysts, regulators and investors who told Reuters the program reflects one of the boldest efforts to date to transform the ways certain metals are bought and sold.

The goal is for the AI model to calculate what a metal should cost when labor, processing and other costs are factored in – and Chinese market manipulation is factored out – and thus give buyer and seller confidence in a deal’s economics.

Some deals with the CMF are beginning to take shape. Nevada officials this week said they would work with the CMF and its AI model to help attract copper smelting to the state. The US has only two copper smelters and as such imports nearly half of its demand for the red metal.

The program has already faced skepticism over whether it can achieve the goal of transforming the long-established ways metals are bought and sold.

Yet it is aimed less at heavily traded metals – such as aluminum – and toward lightly traded metals or metals that see heavy overproduction from some in an attempt to sway market pricing.

For example, the CMF model could help manufacturers forecast available nickel supplies in 2028 if the US were to impose a 100% tariff on that metal from Indonesia, the top global producer.

That data that could help a manufacturer determine whether to invest in a US nickel mine or agree to buy its future production, a step that would help obtain financing for a mine’s construction.

In such a scenario, the nickel buyer would use the AI model’s data to negotiate a long-term deal for guaranteed supply, regardless of whether Chinese miners boost production and drive down market prices, as they have done in recent years.

The CMF’s aim with the AI model does assume that a buyer would be comfortable paying more than the market price for a metal if supply were guaranteed.

China squeeze

The CMF’s entrance into the complex metals markets comes as Beijing restricts critical minerals exports, the very kind of market interference that the CMF officials said underscores the need to build more US mines and processing facilities to power the energy transition.

Prices on the London Metal Exchange and other futures exchanges for nickel, cobalt and some other battery metals have been dominated in recent years by overproduction from Chinese miners operating at a loss in Indonesia and Congo to boost market share.

Many niche-but-essential battery minerals on which Beijing has imposed export controls are not traded or lightly traded, including rare earths – a group of 17 metals used to make magnets that turn power into motion – as well as germanium and gallium.

In response to a request for comment about the CMF, the Chinese embassy in Washington, DC, said that China manages its exports of rare earths in accordance with rules from the World Trade Organization.

“China will continue to work with other countries to jointly undertake the responsibility of global rare earths supply,” said embassy spokesperson Liu Pengyu.

Volkswagen and some other CMF members said they see the CMF as helping boost visibility into what can be an opaque critical minerals supply chain. MP Materials and RTX did not respond to requests for comment.

US President Donald Trump has already ordered his administration to work with private developers to boost US crucial minerals production, a step that could be aided by the data CMF aims to provide markets, program officials said. The president has also launched a study into potential tariffs on all US minerals imports.

Drawing on its government connections, the CMF aims to connect mining projects with potential investors and manufacturers needing more-secure metals supply, said Strayer.

Massachusetts-based rare earths processing startup Phoenix Tailings hopes the CMF can help create US-based prices for minerals tied to actual production costs, said CEO Nick Myers.

Phoenix aims to use data from the CMF as negotiating leverage with potential customers, including manufacturers that are themselves CMF members, Myers said. “In a sector that is opaque, it is one of the tools to get more information,” Myers said.

Not all market observers are convinced that the CMF’s AI model is revolutionary.

“I’ve tried to politely say I think this is worthless,” said Ian Lange, who teaches mining economics at the Colorado School of Mines. Lange contrasted the goals of the Pentagon’s AI model with the much-larger and more-complex global oil market.

“Can we predict the price of oil better now than five years ago? The answer is no. Machine learning doesn’t help,” Lange said.

‘Encourage more visibility’

The Pentagon’s AI model is being trained using more than 70 mining-related data sets and aims to guide investment decisions out for at least 15 years based on how unexpected market shocks – export restrictions, for example – could affect the production or price of a metal.

FactSet, Benchmark Mineral Intelligence and other pricing providers are supplying data, as is the US Commerce Department, officials said.

It is access to analysis of that data – some of which is not public – that the CMF says it believes sets the Pentagon’s AI program apart from ChatGPT or other AI programs.

And that data is the CMF’s biggest cost, part of the reason why the Pentagon’s Defense Advanced Research Projects Agency (DARPA) will fund it for the next few years while the CMF determines whether to charge all members or create a tiered structure with basic members getting free access and others paying for more granular data, officials said.

S&P Global, AI developer Charles River Analytics, and software firm Exiger with price reporting agency partner Metal Miner have developed the model, according to the Pentagon.

S&P Global declined to comment. Charles River Analytics did not respond to a request for comment. Exiger said it believes its data can help forecast a material’s cost and availability and boost supply chain visibility.

The CMF has been organized as a nonprofit trade association with a board of directors comprised of its members. Its staffing is small – fewer than 10 employees – and its annual budget is not disclosed.

DARPA does not have a representative on the CMF board, but is funding the program through at least 2029 and plans to transfer the AI model’s intellectual property to the CMF by the beginning of 2027, officials said.

There are no plans to make the CMF a for-profit entity, although there may be charges in the future for access to more detailed data sets, officials said.

The CMF is launching a campaign to attract more members – especially from the semiconductor, aviation and defense industries – and offering free membership for the next 14 months while the Pentagon funds data collection, Strayer said.

Foreign governments are also studying whether to join the CMF and use its data, including copper-rich Zambia and cobalt-rich Democratic Republic of Congo, CMF officials said, adding they aim to make the program international in scope to boost metals market transparency.

The Zambian and DRC embassies in Washington, DC, did not respond to requests for comment.

As Western miners begin to demand green premiums for their metals, those new agreements increasingly require the very market intelligence the CMF model aims to provide.

“Any mechanism that can give you better modeling of markets is obviously enormously valuable,” said Brian Menell, CEO of TechMet, a mining investor and CMF member.

The AI model introduces another variable for the LME to contend with, especially as the exchange is struggling as rivals in Chicago and Shanghai try to take market share for some niche battery metals.

The LME declined to comment.

(By Ernest Scheyder; Editing by Veronica Brown and Claudia Parsons)

The agreement “signals clearly to Russia that the Trump administration is committed to a peace process centered on a free, sovereign and prosperous Ukraine over the long term,鈥� Treasury Secretary Scott Bessent said in a statement late Wednesday.

Ukrainian Economy Minister Yulia Svyrydenko also confirmed the deal on social media. In a , she wrote: 鈥淭ogether with the United States, we are creating the Fund that will attract global investment into our country.”

The deal, as first reported by Bloomberg News, will grant the US priority access to new investment projects involving critical materials such as aluminum, graphite, oil and natural gas. It also establishes a reconstruction fund, managed by Washington, through which profits will be funneled.

The fund is intended to support Ukraine鈥檚 recovery and offset future US military assistance, the draft of the agreement reads.

Trump’s 100th day

The announcement comes as US President Donald Trump marks the first 100 days of his new term, amid mounting pressure to deliver foreign policy wins and restore his political standing. Trump, whose support Kyiv views as critical to any potential truce with Moscow, has expressed frustration with the pace of ceasefire negotiations.

鈥淲e made a deal where our money is secure, where we can start digging and doing what we have to do,鈥� Trump told a Cabinet meeting on Wednesday. 鈥淚t鈥檚 also good for them because you鈥檒l have an American presence at the site 鈥� that will keep a lot of bad actors out.鈥�

The agreement follows weeks of negotiations, including a visit by Ukrainian officials to Washington earlier this month. Talks had stalled over technical details until the sides agreed to finalize all components of the deal simultaneously.

Earlier in the day, the Financial Times reported the deal had hit a last-minute snag, with issues arising related to governance, transparency mechanisms and the traceability of funds.

Resource partnership

The reconstruction fund is designed to facilitate future cooperation in energy and resource development, including mining and technology. Kyiv views the pact as a strategic step toward its long-term goal of joining the European Union鈥攁n issue Ukraine insisted must not be compromised.

According to Reuters, while the agreement gives US preferential access to new Ukrainian natural resources deals, it would not automatically hand Washington a share of Ukraine’s mineral wealth.

US officials said that the deal does not require Ukraine to repay past military aid, estimated in the billions of dollars since Russia鈥檚 full-scale invasion began over three years ago. Ukrainian Prime Minister Denys Shmyhal confirmed that Washington had dropped its earlier demand for retroactive compensation.

鈥淭his economic partnership positions our two countries to work collaboratively and invest together,鈥� the US Treasury said.

The miner’s consolidated profit attributable to owners of the company surged 154% to 34.83 billion rupees (around $412 million) in the quarter.

The company said its normalized tax rate dropped to 28% from 46% in the year-ago quarter, mainly due to changes in its profit mix and a reduction in the tax rate of a foreign subsidiary.

Overall revenue increased by around 14% to 397.89 billion rupees, boosted by higher prices for aluminum and zinc, which gained by 19.6% and 17.5%, in the quarter, as per data from brokerages.

Vedanta’s aluminum business is the biggest in India and contributes about 40% of the company’s revenue. Zinc is its second-biggest business, followed by copper, whose prices gained 9.3% in the quarter.

The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) rose 30% to 116.18 billion rupees.

Its EBITDA, or core profit, margin expanded to 35% from 30% a year ago, helped by the strong commodity prices and cost-saving initiatives.

Earlier this week, Vedanta’s subsidiary Hindustan Zinc reported a higher fourth-quarter profit, although its finance chief flagged price volatility due to the uncertainty related to US tariffs.

($1 = 84.6170 Indian rupees)

(By Manvi Pant; Editing by Savio D’Souza)

Read More: Mining billionaire Agarwal moves closer to breaking up his empire

Industry sources said the turnaround came after members told the LME that the plan would be expensive for them and that other exchanges such as COMEX do not have this requirement.

The exchange’s plans to oblige members to transact private deals, known as over-the-counter (OTC) trades, on its electronic trading system Select were intially mooted in a white paper last year.

There will be a consultation period until June 13 on the revised plans, which include hedging LME contracts on Select.

The LME will progress with the original proposal if market monitoring indicates that on-exchange controls are encouraging more trading to take place OTC.

“Given this, the LME intends to increase the fee for OTC (trades) to be twice that of exchange business,” the exchange said in a release on Wednesday.

Fees for using LME prices in OTC contracts are $2.36 per lot. For copper where one lot is 25 metric tons, that would amount to nearly 10 US cents a ton.

Since the paper was published the LME, owned by Hong Kong Exchanges and Clearing, has talked to its members and the wider metals market about its plans to boost transparency and liquidity.

“We have listened carefully to these views and they have enabled us to refine different elements to better meet the needs of different sections of the market,” said LME chief executive Matthew Chamberlain.

Earlier this year Reuters reported that the Futures Industry Association (FIA) and the Association for Financial Markets in Europe (AFME) sent a joint letter to the LME laying out members’ concerns about these proposals.

The LME, the world’s largest and oldest forum for trading metals, has also tried to address members’ concerns about hedging LME contracts or block trades of up to 10 lots for the most liquid contracts, which include the three-month benchmarks.

“The feedback received suggested that there should be differentiation across different metals,” it said.

The LME has analyzed factors such as bid/ask spreads, size of the book, average trade size and notional size. It is proposing 15 lots or 375 tons for aluminum, 10 lots or 250 tons for copper, zinc and lead and 5 lots or 30 tons for nickel.

The plans also include expanding the definition of lower-cost short-dated carry trades to 60 days from 15 days, so long as the contracts to buy and sell are within 15 days of each other.

This will cut costs for physical market buyers and sellers who may want to switch delivery dates.

(By Pratima Desai and Eric Onstad; Editing by Jan Harvey and Freya Whitworth)

China’s aluminum production juggernaut is finally running out of road as the country’s output approaches the government’s capacity limit.

Massive investment in primary metal smelting capacity has lifted Chinese production to 43 million in 2024, or 60% of global output, from just four million metric tons in 2004.

Its growing dominance of the global aluminum supply chain has met increasing resistance from Western countries, initially in the form of trade complaints and anti-dumping duties and more recently in the form of US tariffs.

None of which has stemmed China’s exports of semi-fabricated aluminum products, which jumped by 19% to hit a record 6.2 million tons last year.

But things are about to change.

Beijing’s aluminum “Action Plan” for 2025-2027 confirms the capacity cap remains in place and sets out a strategy for what happens next.

Touching the ceiling

China’s primary aluminum production grew by 2.6% year-on-year in the first quarter of 2025, according to the International Aluminium Institute.

Annualized production averaged 44 million tons over January-March, just a million tons short of the 45-million ton cap, which was set in 2017.

It is technically possible for the country’s production to exceed the cap, according to consultancy AZ Global.

Smelter capacity is rated by designed amperage for the electrolysis production process but “one of the first jobs of any plant manager is to push output to above the rate,” it says. Nudging the amperage higher allows a smelter to produce over its nameplate capacity.

But AZ China estimates that capacity utilization in China is already very high at 98.2%, leaving little room for further collective amperage creep.

It is also clear that China’s production growth is starting to slow from the average 4.0% annual rate seen over the last five years.

Going green

Chinese operators are still building new smelters, but the new capacity must be offset by closures of older capacity.

Indeed, Beijing’s policies for the sector are focused on eliminating less efficient capacity and ensuring newer smelters are powered by renewable energy resources.

Aluminum producers are migrating from coal-rich provinces to new energy hubs, such as Yunnan with its abundant hydro power and Inner Mongolia, which has massive wind and solar potential.

The aim is to produce more low-carbon metal and the action plan calls for renewable energy to account for 30% of national smelter power demand by 2027.

To offset slow to no growth in primary production, Beijing is seeking to stimulate production from scrap with a recycling target of over 15 million tons per year in 2027.

Reduced exports

Another offset has already kicked in.

The government removed tax rebate subsidies of 13% on exports of aluminum products in December in a move clearly intended to keep more metal in the domestic market.

Exports have since slowed sharply with outbound volumes down by 11% year-on-year in January and February.

Analysts at Macquarie Bank forecast exports to fall by 8% over 2025 with any sharper collapse unlikely since the world outside of China is heavily dependent on its products to the tune of around 15% of total demand.

Some Western buyers will in all likelihood at least partly accept the higher cost.

But the chances are that Chinese aluminum exports may have peaked.

Reprieve for Western producers?

The combination of slowing Chinese domestic production growth and reduced export flows opens a window of opportunity for the rest of the world’s primary aluminum producers.

The United States has nearly a million tons of idled smelting capacity. US President Donald Trump’s 25% import tariffs on aluminum are intended to stimulate restarts.

Europe too has around half of its primary smelting capacity out of action after the power price surge that followed Russia’s invasion of Ukraine in 2022.

The structural changes being implemented by the world’s largest producer may offer such plants a reprieve, although restarting idled capacity is also a question of both aluminum and power prices.

There is, however, renewed interest in building greenfield smelters in the West after years of low investment.

US producer Century Aluminum has received $500 million in government funds for a project to launch the first new smelter in the United States in 45 years.

Rio Tinto is studying low-carbon smelter projects in both Finland and India.

But Chinese dominance will remain

However, Chinese producers are also going overseas due to the lack of domestic expansion potential.

Indeed, Beijing’s aluminum action plan calls for deeper cooperation with resource-rich nations such as Guinea, where China’s Chinalco is part of a project to convert the country’s bauxite resources into alumina.

In Indonesia, Shandong Nanshan Aluminium is already producing alumina and plans to expand its refining capacity and to add a 260,000-ton-per year smelter.

China may have stopped building domestic capacity but evidently has no intention of loosening its grip on a metal that the United States and the European Union both classify as a critical raw material.

(Editing by Barbara Lewis)

Energy-intensive metal production can have a major impact on the environment because of the carbon and other pollutants that are emitted. Some end-consumers are willing to pay a premium for sustainable practices that cut emissions.

“By making a sustainability price differential public, the value attached to sustainable metals will be transparent and could support the development of the market for sustainable metals,” the exchange said in a release.

“The LME is discussing its proposals with a range of physical market stakeholders, and will provide further progress updates in due course.”

The LME, the world’s largest and oldest forum for trading metals, partnered with digital platform Metalshub for an initiative launched last year to develop a price discovery mechanism for low-carbon nickel.

It is now planning to launch a broader series of sustainable metal premia for the aluminum, copper, nickel and zinc traded on its platforms, underpinned by a robust assessment process.

“We welcome the LME’s proposal as a much-needed move to enable the proper pricing of low-carbon, sustainable products,” said Nick Stansbury, head of climate solutions, asset management, at financial services company L&G.

“We believe transparent pricing of sustainable materials is critical to incentivizing investment into transition technologies in the mining industry.”

The exchange will aim to establish an administrator to set the rules, policies and process for the sustainability premia.

Its proposed sustainability criteria would include carbon footprint thresholds, calculated with a metal-specific carbon footprint methodology, and third-party sustainability assurance.

(By Anjana Anil and Pratima Desai; Editing by Kirsten Donovan)

Overseas sales of the raw material for smelting aluminum more than doubled from a year earlier to 300,000 tons, according to the latest Chinese customs data. That figure was exceeded only in October 2018, when a refinery curtailment in Brazil and US sanctions on United Co. Rusal International squeezed the global market.

China鈥檚 alumina market has been on a roller-coaster of late. Prices nearly doubled last year before crashing as a wave of new capacity was brought online, forcing the industry to seek foreign buyers.

Unlike other Chinese metals, including steel and aluminum, that have drawn scrutiny from trading partners after the country鈥檚 exports swamped world markets, alumina sales are contained to only a few main buyers.

Russia remains the biggest destination as its aluminum producers continue to grapple with a shortage of feedstock since the invasion of Ukraine. The country accounted for 48% of China鈥檚 exports last month. Rusal, its biggest aluminum maker, signed a landmark deal in 2023 with a Chinese plant specifically to plug the gap in supply.

Indonesia, which hosts Chinese smelters, and the United Arab Emirates took 19% and 23%, respectively.

Traders shipped extra alumina overseas after a plunge in domestic prices widened the window for arbitrage, said Zhang Meng, an analyst with consultancy AZ China Ltd. Volumes are likely to remain elevated at between 150,000 and 200,000 tons in coming months, he said.

The Chinese government, meanwhile, is trying to tackle the surplus by curbing excessive investment, including a ban on new plants in heavily polluted areas. The directive mirrors similar guidance on raw materials given to China鈥檚 copper smelters, another industry contending with chronic overcapacity.

The China Nonferrous Metals Industry Association last week criticized elements of the alumina sector鈥檚 blind expansion. The industry body said China has about 15 million tons of capacity under construction, and more than 20 million tons at the planning stage. Those expansions would significantly add to China鈥檚 existing 107 million tons of annual capacity.

Read More: China鈥檚 export controls are curbing critical mineral shipments to the world

While prices of aluminum, zinc, and copper have given up the heady gains of 2024, the 71-year-old tycoon is betting that a simpler structure for the sprawling group and growing demand for critical minerals will add to the allure of his companies even as the specter of a global recession looms.

The overhaul will allow the group to list each of its key businesses: aluminum, oil & gas, power, iron & steel, along with the publicly traded core company Vedanta. The demerger could provide new funding sources and increase financial transparency across the group, according to Bloomberg Intelligence analyst Mary Ellen Olson.

鈥淭he time for growth is now as demand is strong, supply is tight, and we鈥檙e positioned in the right markets,鈥� Agarwal said in a recent video interview from his London home, adding that most of the materials mined by his company are locally consumed. The billionaire said that this makes Vedanta less vulnerable to potential disruptions in global supply chains arising from US President Donald Trump鈥檚 tariff measures.

Vedanta is also expanding the gamut of its operations by winning rights to mine critical minerals like nickel, chromium, platinum, and cobalt in India through November auctions. The global demand for these and other metals that are key to energy transition remains high and will give the group the next fillip of growth, Agarwal said.

Middle East and Africa

Agarwal has long dreamed of building an empire that spans continents and competing with the ranks of the world鈥檚 largest diversified miners, including Rio Tinto Group and BHP Group Ltd.

The group plans to spend more on overseas projects and is doubling on investments in the Middle East and Africa. Vedanta is set to invest $2 billion in copper-processing facilities in Saudi Arabia 鈥� one of the largest by a foreign firm 鈥� as the oil kingdom aspires to build its metals and mining industries significantly.

鈥淪audi not only has good geology but strong local consumption too,鈥� Agarwal said, adding that 鈥渇unding is never a problem for a project like that.鈥�

According to local government estimates, Saudi Arabia has untapped resources, including phosphate, copper, gold, and bauxite, worth as much as $2.5 trillion. About a third of its investments in the country will be funded through internal accruals, and for the rest, the group will seek project financing, Agarwal said.

The company is currently seeking funds to develop mines in Africa, too. The Konkola Copper Mines in Zambia, which it controls, has a major copper deposit and cobalt reserves, according to Vedanta.

The financing options being weighed range from a billion-dollar bond offering, 鈥渙ff-take financing, or sale of a minority stake to global investors, for which there is significant demand,鈥� Agarwal said.

Cutting debt

Vedanta shares dropped about 7% this year in Mumbai trading amid a slump in commodities prices. Other than economic growth woes, weighing on investor sentiment is the company鈥檚 $6.2 billion debt, the upshot of an acquisition spree since the turn of the century that includes stakes in Bharat Aluminium Co. and Hindustan Zinc Ltd.

Over the last two years, Agarwal has been on a drive to cut leverage and push back repayment deadlines on the group鈥檚 borrowings. The plan is to halve it over the next three years.

The group will be cautious about loading up on debt as it chases growth for each demerged unit, he said. All existing shareholders of Vedanta will receive one new share in each of the newly listed entities against each share they own in the parent company.

鈥淭here is no need for a stake sale to reduce our debt at the parent company level, and neither are there any plans to sell our stakes in any of the demerged entities,鈥� Agarwal, who started as a scrap metal dealer and has weathered cash crunches and government friction, said. Each listed company can look at issuing fresh shares to raise funds for expansion, he said.

The so-called debt to earnings before interest, taxes, depreciation, and amortization ratio 鈥� a financial metric that measures a company鈥檚 ability to pay off its debt obligations 鈥� for Vedanta has to be brought down to 1 from the current 1.4 and maintained, according to him.

Over the years, Agarwal has been grooming his daughter Priya Agarwal Hebbar to take over from him as the head of the conglomerate. A psychology and film studies graduate from the University of Warwick, the 35-year-old is the chairwoman of Hindustan Zinc and is on the board of Vedanta.

鈥淭he group鈥檚 future is very focused on transition and critical minerals, and that is where the company will go,鈥� Hebbar said.

(By Anto Antony)

ERG, a Luxembourg-based producer of copper, cobalt, aluminum and iron ore that is 40%-owned by the Kazakh government, said last year it had formed a task force to explore deposits of rare earth and rare metals in Kazakhstan.

Those minerals have gained particular attention in recent months as US President聽Donald Trump’s聽administration seeks聽alternatives to China聽to supply its domestic industry as a聽trade war聽between the countries escalates.

According to a source close to the company, talks between ERG and Cameron have been going on since the end of last year. Cameron shares a name with the Academy Award-winning film director, but the two are not related.

ERG, the Kazakh government, and Cameron, once a board chairman of former FTSE 250 mining firm Petropavlovsk, did not comment.

According to Cameron’s letter to the ERG board, a copy of which was obtained by Reuters, Goldman Sachs is in preliminary talks to advise on the deal.

“The financing will come from a combination of my own funds, as well as equity contributions from other investors in the United States, and possibly Australia and the Middle East,” the letter said.

Another source close to the transaction told Reuters the investor’s interest in ERG is partly linked to Kazakhstan’s potential in critical minerals exploration and mining. Kazakhstan aims to lift rare and rare earth metals output by 40% by 2028, with ERG seen taking a major role in the initiative.

This month, Kazakhstan’s government聽announced聽that its geologists had discovered a large rare earth deposit with estimated resources exceeding 20 million metric tons.

Kazakhstan’s Prime Minister Olzhas Bektenov said last year that data concerning the country’s deposits of rare and rare earth metals, a state secret since Soviet times, is being gradually declassified.

If confirmed, this discovery could position Kazakhstan among the top three holders of rare earth reserves globally, following China and Brazil.

ERG once produced one-fifth of the world’s gallium, a rare metal used in microchips and included on the US list of critical materials. However, it ceased production after China increased its output of the metal in 2012.

Beijing in December聽banned gallium exports聽to the US after a crackdown by Washington on China’s chip sector.

In 2013, ERG was taken private in a $4.5 billion buyout by its three founders, who each owned approximately 20% of the company, along with the government.

Last month, one of ERG’s founders and its board chairman, Kazakh-Israeli businessman Alexander Mashkevich, passed away, leaving only one of the original founders, Patokh Chodiev, among the current shareholders.

(By Gleb Bryanski and Mariya Gordeyeva; Editing by Guy Faulconbridge and Jan Harvey)

The world鈥檚 largest aluminum exporters also played down the impact of US tariffs on their outbound shipments, citing robust demand for Chinese metal from other markets.

鈥淲e will stick to expansions overseas鈥� due to 鈥渂ig pressure鈥� on domestic capacity, said Weixin Chen, secretary of Jiangsu Dingsheng New Materials Co., which already has production bases in Thailand and Europe. She spoke at a conference in Suzhou in the eastern province of Jiangsu on Wednesday.

As they battle oversupply at home, Chinese aluminum fabricators, which dominate global capacity, have faced complaints from foreign competitors that say they鈥檙e flooding the market. Trump has imposed blanket 25% tariffs on all imports of the metal, along with steel, saying they harm US manufacturing.

But China鈥檚 producers are 鈥渘umb to tariffs,鈥� said He Zhigang, deputy general manager of Henan Mingtai Al. Industrial Co., citing years of trade restrictions imposed by Western countries. He added demand for the metal produced in China remains strong due to its competitiveness. 鈥淚t just need a bit time to overcome this round of anti-dumping from the US,鈥� He said at the industry conference.

Still, China鈥檚 aluminum exports fell this year following the removal of a tax rebate, which had helped fuel a decades-long boom in outbound shipments. Exports fell more than 7% in the first three months to 1.37 million tons.

Read More: China鈥檚 export tax bombshell rocks aluminum market

The Pittsburgh-based company incurred the costs on imports of aluminum from Canada, its largest metal-producing region. The disclosure is one of the first indications that US companies are being adversely affected by the Trump administration鈥檚 trade war.

Alcoa, in a statement, said it has 鈥渆ngaged with customers, suppliers and logistics companies to avoid supply disruption.鈥�

The aluminum producer said throughout the beginning of the year it was actively communicating with administrations, governments and policy makers regarding the impact of tariffs on trade. Chief executive officer Bill Oplinger warned investors in February that Trump鈥檚 metal import duties would put about 100,000 US jobs at risk.

(By Joe Deaux)

Read More: Bad news for American beer drinkers as aluminum tariffs kick in

May delivery copper is now down 18.4% from its record high hit near the end of March on frantic US buying ahead of the tariffs, only just escaping a technical bear market. In London copper did not fare much better, dropping 6.8% to $8,734 per tonne, the lowest since March 2020 at the onset of the covid pandemic.

Fair warning

A warning issued by BNP Paribas last week has turned out to be prescient. The French bank predicted a collapse in copper prices with senior commodities strategist David Wilson saying the imposition of tariffs will end the pricing dislocation, turning the market鈥檚 focus to the negative demand impact of US trade policies. BNP predicts a retreat to $8,500 a tonne this quarter.

Given its widespread use in industry, manufacturing, and construction copper is particularly vulnerable to slowing economic growth and the prospect of an outright recession sparked by what now appears to be a full-blown global trade war.

Max Layton, global head of commodities research at Citigroup, said in an interview with Bloomberg Television that copper could fall by another 8% to 10% in the coming weeks while JP Morgan now predicts a 60% chance of a global recession if the tariffs continue.

The entire base metals complex retreated sharply leading to a broad-based sell-off in the sector.

Shares trading in New York of world no 1 mining company BHP (NYSE: BHP) dropped 9.5% for a market value of $107.3 billion while its nearest rival Rio Tinto (NYSE: RIO) fell 6.4% to $93.5 billion in three times usual trading volumes.

Weakness in the Australian giants were compounded by a bearish outlook for iron ore, their traditional bread and butter commodity after Goldman Sachs predicted the steelmaking raw material could fall by as much as 15% from current levels around $100 a tonne.

Bear market

Copper specialist Freeport-McMoRan (NYSE: FCX) which vies with BHP as the world鈥檚 top copper producer after Chile鈥檚 state-owned Codelco was the hardest hit on the day with a 13.1% decline after nearly 45 million shares changed hands. FCX is down 24.1% over the past week and is now worth $41.9 billion in New York.

Mexico鈥檚 Southern Copper (NYSE: SCCO) fell 9.6% on Friday bringing losses for the week to 16.7% and a market value of $62.4 billion. Southern Copper and Chinese firm Zijin Mining (NYSE: ZIJMY), down 7.2% at $56.9 billion both produce more than 1 million tonnes of the metal annually.

Glencore and (LON: GLEN) Anglo American (LON: AAL) depository receipts trading in the US declined by 11.5% and 11.0% respectively affording the diversified miners market capitalization of $36.9 billion and $28.6 billion respectively. Swiss-based Glencore and London-listed Anglo American are the world鈥檚 number six and seven copper companies based on output and both are down 20% for the week.

Further down the production stakes, Canada鈥檚 Teck Resource (TSE: TECK.B) also took a major hit, down 12.1%, while fellow Vancouver-based copper miners Ivanhoe Mines (TSE: IVN) saw its shares decline by 12.6% and First Quantum Minerals (TSE:FM) fell 12.8%.

However, full-scale mergers and acquisitions activity among diversified miners could be hampered for now by prohibitive high costs and significant chances of eventual rejection, investors said ahead of a global gathering of the copper industry for the CESCO event in Santiago, Chile next week.

Reluctance to engage at a company level is seen in LSEG data showing M&A in mining sector fell 27% in value terms to $15 billion in the first quarter compared to the same 2024 period.

Since the start of 2024, BHP’s shares have slumped 26% and Rio Tinto has dropped 23%, while Glencore’s shares have collapsed 42%.

Companies such as BHP and Rio Tinto have robust balance sheets and are delivering handsome returns to shareholders, but they are approaching a period of stalled earnings growth.

With no other country able to pick up the slack left by China and trade wars triggered by US President Donald Trump’s import tariffs, miners are thinking more about creating value and strength through scale.

“We are seeing more discussions about partnering, joint ventures and asset sales,” said George Cheveley, portfolio manager at Investment Manager Ninety One.

“We’re more likely to see smaller deals rather than wholesale takeovers. They are easier regulation wise and an easier way of improving your asset base and derisking your portfolio.”

Australia-listed BHP also recently formed a joint venture – Vicu帽a – with Lundin Mining. Vicu帽a now owns the Filo copper project in Argentina and the Josemaria project in Chile.

Struggling with declining ore grades BHP is planning to invest $10.8 billion over a period of 10 years in Chile starting with the Escondida operation

Instead of investing for growth, some have typically opted to boost shareholder returns with dividends and share buybacks.

“Our analysis suggests that valuation multiples are not responding to higher payout ratios and buybacks are no longer delivering strong returns making the pivot to growth more appealing,” said James Whiteside, head of corporate for metals and mining at Wood Mackenzie.

“Diversified companies seeking relevance through big payouts aren’t being rewarded, but the read across from copper miners is, investing in production growth pays.”

Historical precedents

“Historically, merger discussions often occur either at the very top of the cycle, because mining companies have a lot of money, or at the very bottom of the cycle, because there’s a need to find ways to create value,” said Christel Bories, chairman of French mining group Eramet.

The ball started rolling in April 2023 when London-listed Glencore’s attempt to buy Teck Resources for $23 billion was rejected. Glencore instead bought Teck’s metallurgical coal portfolio for $7 billion.

But it was when the world’s biggest miner BHP went hostile with a $49 billion bid for Anglo American, the mining world understood a restructuring of the industry was on the horizon.

“It’s important in the mining world for BHP to kick off the M&A cycle because it makes it easier for other CEOs to sell the idea to their boards,” said Liberum analyst Tom Price.

What has made selling the idea of M&A to company boards easier this time are forecasts of rocketing copper demand partly due to power grid replacement and upgrades and e-mobility which includes electric vehicles, scooters and bikes.

Information provider Benchmark Mineral Intelligence (BMI)expects copper demand from these two end-use segments will total 4 million metric tons in 2030 or 13% of global refined demand from 2.6 million tons or 9.5% this year respectively.

Overall, miners need to invest $200 billion to increase their copper production by 9.6 million tons, according to consultancy Wood Mackenzie.

China with its massive manufacturing sector accounts for roughly 55% and 50% of global consumption of copper and aluminum used in transport, packaging and construction.

“While stimulus is probably required, China’s various strategies over recent years have only stabilized activity in its commodity-intensive property/infrastructure sectors. They remain quite weak,” said Liberum’s Price.

(By Pratima Desai, Gus Trompuz and Divya Rajagopal; Editing by Veronica Brown and David Evans)

The sweeping 鈥淟iberation Day鈥� measures include a universal 10% tariff on nearly all imports and targeted levies on 60 countries, marking one of the most dramatic shifts in international trade policy in a century. 

Market reaction was swift and severe. Stocks plummeted on fears that the tariffs, far harsher than expected, could disrupt global supply chains. The FTSE 100 suffered its worst single-day decline since August, dropping 1.5%, while U.S. tech-heavy indices like the Nasdaq plunged by up to 4.5%, erasing trillions in market capitalization. Apple alone lost nearly $300 billion due to its heavy reliance on Asian manufacturing. The US dollar hit a six-month low as concerns over an economic slowdown mounted.

China faces a 34% tariff, the European Union 20%, Japan 24%, South Korea 25%, India 26%, and the United Kingdom 10%. Canada and Mexico are temporarily exempt under the USMCA, though analysts warn this protection may be short-lived. Automobiles and auto parts are subject to a separate 25% tariff, a move that could upend the electric vehicle (EV) market, given that nearly 40% of U.S. EVs were imported in 2024.

“Even when factoring in the exemptions for a wide range of products (including critical minerals, gold, silver and PGMs), we estimate that US weighted-average import tariffs now average 20%,” analysts at BMO said in a report. This means that the world’s largest consuming country now has one of the harshest tariff regimes, they noted.

These were the short-term reactions. In the long-term, tariffs are set to reshape the battery supply chain, Benchmark Mineral Intelligence (BMI) and Rho Motion analysts said on Thursday.

鈥淯S tariffs and retaliatory measures are likely to be inflationary, contributing to boosting US recessionary fears and leading to downside risk to copper demand,鈥� Bryan Bille BMI policy and geopolitical principal, said during a webinar.

The US energy storage sector, which relies heavily on Chinese lithium-ion cells, is bracing for soaring costs. Over 90% of lithium-ion energy storage cells deployed in the US last year came from China. With new levies, Chinese lithium iron phosphate (LFP) cells now face a cumulative tariff of 64.9%, escalating to 82.4% by 2026. While this could bolster domestic production, current supply constraints may push prices back to 2022 highs.

Some critical minerals 鈥� including copper, cobalt, lithium, nickel, manganese, fluorspar, natural graphite, silicon, rare earths, and petroleum coke 鈥� have been exempted, underscoring the US鈥檚 heavy reliance on foreign sources, the analysts noted.

The country remains entirely dependent on imports for materials like natural graphite and high-purity manganese sulphate. However, speculation is growing that Trump may invoke Section 232 of the Trade Expansion Act to impose future levies on these strategic resources.

have vowed to retaliate, warning that the tariffs could ignite a full-scale trade war, disrupt supply chains, and drive up consumer prices. Economists caution that prolonged economic uncertainty could tip major economies into recession.

_____

RELATED: Copper price plummets amid fears of Trump tariffs hurting demand

The long list of exemptions to the cascade of duties captures all base metals, precious metals including gold, as well as niche materials. That means that tariffs on steel, aluminum and, eventually, copper won鈥檛 be stacked on top of the newly-announced country levies.

By leaving out vital metals, the administration lessens the risk of price dislocations of the kind seen across the global copper market in recent weeks. But it does not remove uncertainty around the handling of commodities in future.

A senior White House official said critical minerals 鈥� a cluster of materials deemed to be of special strategic value 鈥� were among products where President Donald Trump was potentially looking to launch tariff investigations under Section 232 of the Trade Expansion Act.

The US is highly dependent on imports for many metals in which China dominates the supply chain, and Trump has made clear his interest in boosting US access to critical minerals, rare earths in particular. Any tariffs would need to be set against the risk of choking off flows to domestic manufacturers.

The US relies on imports for 80% of its rare earths, nearly three-quarters of its zinc and tin, and more than half of its lithium, for example, according to the US Geological Survey. When it comes to steel, there is less reliance on overseas supplies, which makes it arguably easier to impose tariffs on imports.

China has yet to respond in full detail to Wednesday鈥檚 blitz, but its answer to US measures so far has been concentrated in curbing exports of minor but vital metals, where its strong grip on production can be used as a trade weapon.

US steelmakers have traded broadly higher this year, outpacing the larger market, as the tariffs helped boost prices of the metal. But the moves come at a price. Demand has been weak amid lackluster construction markets, stubborn inflation and high borrowing costs.

Nucor Corp., the largest American steelmaker, Steel Dynamics Inc. and United States Steel Corp. have warned investors of lackluster earnings results for the first quarter.

Performance for aluminum companies has been more uneven. Shares of Century Aluminum Co. are up about 2% for the year, while Alcoa Corp. is down more than 18%, with much of it鈥檚 aluminum produced outside the US.

(By Joe Deaux)

But even as European policymakers work to build a future industrial base, they are facing a crisis in the region’s existing metals sector.

Chinese over-capacity and high energy prices have accelerated the long-term decline of European steel and aluminum production.

The latest threat, however, is coming from the United States. President Donald Trump’s tariffs, particularly the increased tariff on aluminum imports, risk displacing a flood of metal into Europe.

Europe’s response is shaping up to be equally protectionist, heralding more fracturing of global trade patterns.

Building for the future

Europe’s strategic projects qualify for fast-track progression through the permitting stage – a maximum 27 months for mine projects and 15 months for processing projects – and access to funding both at European and national level.

The list is heavily weighted towards battery inputs such as lithium, cobalt, nickel and graphite but also includes more esoteric elements such as gallium, germanium and tungsten. Fourteen out of 17 metals on the EU’s strategic metals list are represented.

The projects across 13 member states extend along the whole length of the supply chain from mining to processing to recycling and even materials substitution.

They should allow the EU to fully meet its 2030 domestic production benchmarks for lithium and cobalt and make “substantial progress” for other battery materials such as nickel, manganese and graphite.

In the case of gallium, used in semi-conductors and currently subject to Chinese export restrictions, METLEN’s project in Greece will cover the region’s needs by 2028.

There is more to come.

The European Commission received 46 applications for projects outside of the EU. A decision on the potential selection of such projects “will be decided at a later stage,” it said.

Current crisis

Europe’s bold ambitions for new energy metals stand in stark contrast to the dire problems facing its traditional metals production sectors.

EU steel output has declined from 160 million metric tons in 2017 to 126 million in 2023. Current steel capacity utilization of around 65% is unsustainable, the Commission said.

The region has lost a significant part of its primary aluminum production capacity for good and around half of what remains has been idled since 2021.

The Commission’s “Action Plan” identifies high power costs as a core problem for its industrial metals base. Power prices surged in 2022 after Russia’s invasion of Ukraine and although they have since fallen, they remain higher than historical levels and well above those in the United States.

A range of solutions is proposed from facilitating more long-term power supply contracts to improving network efficiency and accelerating permitting for building more renewable grid capacity.

In the short term member states are called “to rapidly implement and make use of all the flexibilities (of state aid rules) to lower costs for energy-intensive industries.”

Tariff turbulence

The threat of metal diverted from the United States washing up in Europe has focused minds on how to prevent further contraction in Europe’s steel and nonferrous metals sectors.

Tighter steel import quotas could come as soon as next month, according to European Commission Executive Vice-President Stephane Sejourne.

A “melted and poured” rule, allowing the Commission to take action against the original producer of the metal rather than a third-party transformer, is under consideration.

Plans for import restrictions on aluminum are being fast-tracked with the Commission gathering “relevant evidence” in preparation for some sort of safeguard measures.

This is a race against time for many struggling operators.

Paul Voss, Director General of European Aluminium, has called for “immediate, targeted interventions to stabilize the sector now.”

One of those interventions would be to stem the flow of recyclable materials out of Europe.

Scrap wars

Although the US tariffs of 25% on aluminum imports have been presented as “without exceptions of exemptions”, they do not apply to the movement of scrap.

Aluminum scrap exports from the EU were already on track to hit a record of 1.3 million tons last year. That figure is likely to rise this year as more material goes to the United States, where processors can remelt it into aluminum products and pocket the tariff premium.

European copper recyclers are similarly worried that the threat of US copper tariffs is already pulling more units to the United States along with refined metal.

The Commission is promising to propose by the third quarter of the year appropriate trade measures to ensure more scrap stays in the EU.

That will include reciprocal measures on both those countries applying metals tariffs and on those that currently block exports of scrap.

Global scrap trading has so far been largely unaffected by geopolitics but that looks about to change.

Sense of urgency

The European Union is playing catch-up with the United States, when it comes to investing in critical metals capacity.

But the 27-member bloc has no equivalent of the presidential powers used by both the Joe Biden and Trump administrations.

The combination of strategic projects and metals action plan shows that the European Commission has woken up to the urgency of both building for the future and protecting what it already has.

But as both corporates and lobby groups have been quick to point out, words need to be followed by action.

Or to quote Voss from European Aluminium, “strategy alone won鈥檛 keep our operations running.”

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)

(Editing by Jane Merriman)

Companies won鈥檛 be allowed to build new alumina plants in heavily polluted areas, according to an aluminum industry development plan for 2025-2027 issued by the Ministry of Industry and Information Technology on Friday. Alumina is made from bauxite, which is usually imported, and is the key feedstock for aluminum, the most widely used metal.

Firms building new alumina projects should also 鈥渋n principle鈥� control enough bauxite supply to feed the plants, a directive that mirrors similar guidance on raw materials given to China鈥檚 copper smelters.

For years, China has pledged to contain the blind expansion in alumina capacity. But a widening surplus of the mineral has led to a surge in exports in recent months.

Aluminum Corp. of China Ltd., the country鈥檚 largest state-owned aluminum producer, said earlier this week that the domestic alumina market would swing to a surplus this year, with around 10.3 million tons of new capacity planned amid limited demand growth.

The country also aims to boost domestic bauxite resources by 3%-5% through 2027, and boost recycled aluminum output to over 15 million tons, according to the plan.

Read More: Chinese firm to build Guinea鈥檚 biggest alumina processing plant

The Geneva-based firm partnered with Zambia in December to launch a metals trading arm, securing access to copper, a metal critical to the energy transition.

“We had a bit of catching up to do [and] we are looking at substantial investment in the metals sector,鈥� chief executive Marco Dunand told this week.聽聽鈥淭here’s lots of opportunity to pre-finance, lots of opportunities to co-invest.鈥澛犅�

Beyond mines, Mercuria is also targeting logistics and the broader metals supply chain. Earlier this month, it renewed a deal with Glencore (LON: GLEN) to buy copper from the Democratic Republic of the Congo鈥檚 state miner, G茅camines, as part of a push for greater independence in selling its share of joint venture output.

The two trading houses also secured copper from the massive Tenke Fungurume mine, majority-owned by China鈥檚 CMOC Group.

Better known in oil, natural gas and power, Mercuria expects to move about 750,000 tonnes of copper cathode and one million tonnes of copper concentrate, Kostas Bintas, head of metals and minerals, .

鈥淭he idea was to start big, from day one, and it has been executed as such. Because nine months later, we are 70 people, that proves the point,鈥� Bintas, a well-known copper bull who previously co-led metals trading at Trafigura noted.

The move by Mercuria, which already had a mine-seeding business, is part of a broader shift among major energy traders moving back into metals. Vitol Group is also expanding its metals division, initially focusing on aluminum, using capital generated from record-breaking profits.

The energy giants entry challenges smaller metals traders, who have struggled to stay profitable amid high energy prices and supply chain disruptions. The market remains dominated by Glencore and Trafigura, but Mercuria鈥檚 aggressive push signals intensifying competition in the sector.

The European Union (EU) has strengthening the local extraction, processing, and recycling of 14 of the 17 materials it deems critical for its energy transition and security.

The selection of the 47 projects mark a key step in implementing the Critical Raw Materials Act (CRMA), which sets targets for 2030, including extracting 10% of the EU鈥檚 annual consumption, processing 40%, and recycling 25% of these essential materials.

鈥淓urope currently depends on third countries for many of the raw materials it needs the most. We must increase our own production, diversify our external supply, and make stockpiles,鈥� EU executive vice-president for prosperity and industrial strategy, St茅phane S茅journ茅, said in a statement.

The selected projects span 13 EU member states 鈥� Belgium, France, Italy, Germany, Spain, Estonia, Czechia, Greece, Sweden, Finland, Portugal, Poland, and Romania. They focus on key metals and minerals such as aluminium, boron, copper, cobalt, graphite, lithium, nickel and rare earths.

Of the 47 initiatives, 25 involve extraction, 24 focus on processing, and 10 are dedicated to recycling, with some covering multiple functions, the European Commission (EC), which is the EU executive body, said.

For a project to be deemed strategic, the EC must confirm its technical feasibility within a reasonable timeframe and have confidence it can meet production targets while operating sustainably.

Environmental and community organizations argue that some of the selected projects, including the Barroso lithium mine in Portugal and the Rovina gold-copper project in Romania, have faced long standing opposition.

“The Rovina gold-copper open cast mine will destroy pristine nature and displace communities and the Commission’s designation legitimizes a project deemed illegal by courts in Romania,” Roxana Pencea-Bradatan from MiningWatch Romania said in a statement. “This is destruction, not development.”

Another project designated as “strategic” is Anglo American鈥檚 (LON: AAL) Sakatti copper operation in Finland. The mine is set to produce 100,000 tonnes of copper equivalent a year starting in the early 2030s.

Speeding up development

The CRMA entered into force in May last year and the Commission immediately opened applications for projects considered strategic to the bloc, including those outside the EU.

More project lists will follow to address remaining critical materials, including ventures beyond EU borders. 

Lithium features in 22 of the selected projects, followed by 12 for nickel, 11 for graphite, 10 for cobalt, and seven for manganese, bolstering the battery supply chain. A magnesium project and three tungsten initiatives will support the EU鈥檚 defence industry.

The proposed mines and facilities will benefit from streamlined permitting, with a maximum process of 27 months for mining and 15 months for processing or recycling鈥攁n attempt to bypass regulatory bottlenecks that have delayed green projects across the bloc.

A financing group will also help fast-track these capital-intensive initiatives, offering public guarantees from national banks, the European Investment Bank, and the European Bank for Reconstruction and Development to attract private investment.

Emanuel Proen莽a, chief executive of Savannah Resources (LON: SAV), the British company advancing Portugal鈥檚 Barroso lithium project, said the obtention of strategic status marked a significant step toward strengthening Europe’s supply of raw materials.

Savannah plans to construct four open-pit mines in the region to produce enough lithium annually for 500,000 to 1 million electric vehicle batteries. The company is targeting first commercial output by 2027.

Keith Coughlan, of European Metals (ASX:EMH), called the designation of the Cinovec lithium project in the Czech Republic a 鈥渕ajor milestone鈥� for the lithium developer.

Talga Group鈥檚 (ASX: TLG) CEO Martin Phillips said the designation of the company’s Vittangi graphite project in Sweden enhances the company鈥檚 ability to secure financing and finalize offtake agreements.

鈥淕raphite is critical to the lithium-ion battery industry, and increasing EU capacity to produce battery-grade graphite is essential for Europe’s resilience and competitiveness,鈥� he said.

The EC plans to open a new application process for additional strategic projects before the end of the summer, creating further opportunities for investment and development in the raw materials sector.

Vitol Group and Gunvor Group have both taken long positions in the past few months in the LME aluminum contracts nearing expiry that were at times larger than the readily available stock in the exchange鈥檚 warehousing network, according to people familiar with the matter, who asked not to be identified as they weren鈥檛 authorized to speak publicly.

A push into metals by several giants of energy trading has been the talk of the industry in the past year, as the firms embarked on a hiring spree that drove up salaries and bonuses. But this is the first time they鈥檙e playing a major role in the markets, challenging the dominance of incumbents Glencore Plc and Trafigura Group.

The positions were in contracts that have since expired, and it鈥檚 not unusual for big traders to take large positions on the LME in an attempt to secure relatively cheap supplies of physical metal. Vitol and Gunvor鈥檚 recent entry into the market means they don鈥檛 have the longstanding contracts to buy direct from producers that more established traders do.

The LME鈥檚 contracts are physically deliverable, meaning that while the large majority of positions are closed out before expiry, traders can hold onto positions to receive physical metal in an LME warehouse somewhere in the world. Doing so, however, can cause strains in the market, squeezing other market participants with short positions.

The aggressive moves by Vitol and Gunvor caused consternation among rivals and helped push spot aluminum prices to a premium over futures for delivery in three months 鈥� a hallmark of a tight market.

The LME has asked both Gunvor and Vitol about their aluminum positions in recent months, the people said. The exchange asks traders with big positions in contracts nearing expiry how they intend to handle them without disrupting the market 鈥� a step that鈥檚 often used as a way to encourage them to reduce their positions.

Vitol and Gunvor declined to comment. A spokesperson for the LME said the exchange routinely requests further position management information from market participants 鈥渁nd has the power to require positions to be managed as appropriate.鈥�

The heightened competition from energy traders in metals markets comes as the firms are seeking to reinvest the vast windfall profits they made in the wake of Russia鈥檚 invasion of Ukraine. Many see metals, needed in electric vehicle batteries, power cables and renewable energy facilities, as a prospective area for growth even if oil demand starts to decline.

Gunvor and Vitol took large long positions in the LME鈥檚 main aluminum contracts for February and March, respectively, the people said. LME data shows that for the February contract, one trader held a position equivalent to at least 30% of open interest until Feb. 14, three trading days before delivery. For the March contract, one trader held a position equivalent to at least 30% of open interest until March 14, also three trading days before delivery.

In each case, that represented well over 200,000 tons of aluminum 鈥� at a time when so-called on-warrant stocks that are readily available to other buyers have fluctuated between about 204,000 and 258,000 tons.

While Gunvor and Vitol have been making bullish bets on aluminum, another big energy trader, Mercuria Energy Group Ltd., has been a major buyer of copper on the LME, some of the people said. The company is seeking to ship metal to the US to profit from the large gap in prices spurred by the threat of tariffs.

As part of its metals push in the past year, Mercuria hired Trafigura鈥檚 former co-head of metals Kostas Bintas and several dozen others. In a recent interview, Bintas told Bloomberg that Mercuria was currently shipping 85,000 to 90,000 tons of copper to the US.

(By Jack Farchy, Alfred Cang, Archie Hunter and Mark Burton)

“In my opinion, the US government and we are moving closer to a mutual understanding that our acquisition of US Steel will help strengthen the US steel industry and manufacturing through investment, including equity participation,” Nippon Steel president Tadashi Imai told reporters.

Japan’s biggest steelmaker and US Steel will continue negotiations with the US government to reach an agreement on the terms of the equity purchase and future investment plans, he added, while declining to provide any further details.

The administration of US President Donald Trump filed a motion to extend two deadlines in US Steel and Nippon Steel’s lawsuit against a US national security panel to give the government more time to wrap up merger talks with the firms, a filing showed last week.

The filing is the clearest indication that Trump may allow the deal, scuttled by his predecessor Joe Biden, to proceed in some form.

In February, Trump, alongside Japanese Prime Minister Shigeru Ishiba at the Oval Office, said that Nippon Steel’s $14.9 billion bid for US Steel would take the form of an investment instead of a purchase.

Trump also said in mid-February that he would not mind if Nippon Steel took a minority stake in US Steel.

Imai, however, said late last month that the Japanese company’s current merger agreement with US Steel will serve as a starting point for discussions with the US government including the Department of Commerce.

(By Yuka Obayashi and Kantaro Komiya; Editing by Himani Sarkar and Saad Sayeed)

The lender said in the memo this week that borrowers’ total debt service ratio – the percentage of monthly household income that covers housing costs and other debts – will be reduced to 42% from 44%, meaning the borrower will have more room to manage their housing budget and a smaller mortgage.

BMO also added the steel and aluminum sector to its list of industries that are more prone to risk.

“With newly announced tariffs between Canada and the United States, and consideration to the turbulent economic landscape, BMO BrokerEdge has reviewed its risk appetite for tariff-impacted industries,” the memo said.

“As a result, we have revised our temporary lending criteria for self-employed borrowers.”

Canada, the biggest foreign supplier of steel and aluminum to the United States, announced this month 25% retaliatory tariffs on goods including steel, aluminum, computers, sports equipment and other products in response to US President Donald Trump’s tariffs on Canadian-made steel and aluminum.

Steel manufacturers in Canada have said that the tariffs will cause grave concern for Canadian steel workers and have asked the government to support the industry.

A spokesperson for BMO said the measures would not impact workers and were meant to protect customers’ long-term financial health.

Policy adjustments are normal course procedure that reflect multiple inputs including the macroeconomic environment, the lender said.

The list, called limited appetite industries, also includes utilities, construction, and transportation as areas where the lender has a slightly reduced tolerance.

BMO is the first bank in Canada to take such an action in response to the trade war.

Toronto-based mortgage broker and owner at Integrated Mortgage Planners, David Larock, said the change was minor and expects other lenders to make similar adjustments.

(By Nivedita Balu; Editing by Caroline Stauffer and Nia Williams)

Read More: Canada initiates WTO dispute complaint on US steel, aluminum duties

The investment will be to deliver both upstream and high-precision engineered products, Hindalco said in a filing.

The company is on track to surpass 1 million ton of refined copper production, Kumar Mangalam Birla, chairman of Aditya Birla Group, said in an address during a company event.

“The journey marks a transformative path from a metals supplier to an engineered solutions partner,” Birla said.

Hindalco is working on automotive, electric vehicles, packaging, and also collaborating with battery manufacturers, he said.

($1 = 86.3350 Indian rupees)

(By Sethuraman NR; Editing by Savio D’Souza)

The filing is the clearest indication that US President Donald Trump may allow the deal, scuttled by his predecessor Joe Biden, to proceed in some form.

In January, the two companies filed a lawsuit against the Committee on Foreign Investment in the United States, which scrutinizes foreign investments for national security risks, after it recommended that a merger between them be rejected on national security grounds.

The motion last week from the Department of Justice calls for extending briefing deadlines in the CFIUS lawsuit for 21 days, and rescheduling the oral arguments for the week of May 12 from April 24.

“The requested extension will allow the government to complete its ongoing discussions with the parties regarding the US Steel and Nippon Steel transaction with the goal of eliminating the need for this Court’s resolution of the litigation on the merits,” the DOJ said in its filing.

Trump in February said that he would not mind if Nippon Steel took a minority stake in US Steel.

Following his comment, a Japanese government spokesperson said that Nippon Steel was considering proposing a bold change in its previous approach of seeking to buy US Steel.

Nippon Steel also tried to schedule a meeting between vice chairman Takahiro Mori and US Commerce Secretary Howard Lutnick, according to a report in February.

However, no new deal has been inked yet.

In the lawsuit against CFIUS, the companies alleged that Biden prejudiced the committee’s decision and violated the companies’ right to a fair review.

They claimed that the then President did so to win the favor of the United Steelworkers (USW) union in the swing state of Pennsylvania, where US Steel is headquartered, in a bid for re-election.

US Steel and Nippon Steel have consented to the motion, but it still remains subject to court approval.

(By Aishwarya Jain and Alexandra Alper; Editing by Shinjini Ganguli and Kirsten Donovan)

Last month, Trump raised tariffs on imports of steel and aluminum to a flat 25%, without exemptions or exceptions, in a move that was designed to help US industry while contributing to an escalating trade war.

Speaking to reporters on Air Force One, Trump said reciprocal duties on US trading partners would come alongside auto duties.

“In certain cases, both,” Trump said when asked if he would be imposing sectoral and reciprocal tariffs on April 2. “They charge us, and we charge them. Then, in addition to that, on autos, on steel, on aluminum, we’re going to have some additional,” he said.

Trump has said previously that he would impose reciprocal tariffs on US friends and foes alike at the beginning of April.

(By Nathan Layne and Jeff Mason; Editing by Kim Coghill and Lincoln Feast)

Russian aluminum giant Rusal on Friday said it had agreed to buy a 26% stake in an Indian alumina refinery owner for $243.75 million and to acquire up to 50% in stages, a move that should reduce its reliance on third-party raw materials.

Rusal, the world’s largest aluminum producer outside China, has not been directly targeted by Western sanctions against Moscow over the conflict in Ukraine, but lost about 40% of its alumina supplies after Australia halted exports to Russia and Rusal shut down its alumina refinery in Ukraine.

To compensate for falling alumina volumes, Rusal increased its purchases of raw materials from China, India, Kazakhstan, and acquired a 30% stake in a Chinese producer in October 2023, reducing the deficit.

As of November 2024, Rusal was still buying more than a third of the alumina it needs for aluminum production on global markets at exchange prices, which it has said “puts serious pressure on production margins”.

Rusal agreed to acquire, through a wholly-owned subsidiary, up to 50% of Pioneer Aluminium Industries Limited’s share capital in three stages, it said in a statement.

During the first stage, Rusal said it would acquire 26% of Pioneer’s shares for $243.75 million plus the amount of appropriate contractual adjustments for net working capital and debt.

“(Pioneer) owns and operates a metallurgical grade alumina refinery located in the state of Andhra Pradesh, India, with nameplate production capacity of 1.5 million tonnes annually,” Rusal said.

Rusal and the vendors, Pioneer group of companies and KCap group of companies, plan to supply bauxite and receive alumina from Pioneer pro rata to their respective shareholdings, Rusal said.

Hong Kong-listed Rusal on Friday reported a near three-fold jump in its annual earnings, reflecting lower production costs and higher prices for aluminum.

(By Anastasia Lyrchikova and Alexander Marrow; Editing by Elaine Hardcastle)

Hong Kong-listed Rusal, the world’s largest aluminum producer outside China, posted a net profit of $803 million for the year ended December 31, 184.8% higher compared with the $282 million reported in the year-ago period.

Rusal flagged that the transition towards greener forms of energy accelerated in 2024 amid tighter global emission standards, growing consumer demand for sustainable products and the rising importance of environmental, social and governance (ESG) criteria.

Consumption of aluminum in the transportation industry remained the largest in 2024 and continued to gain pace despite a slip in overall vehicle production during the year.

“The EV market is expanding due to stricter emissions regulations, government incentives, and advancements in battery technology,” Rusal said in a filing to the Hong Kong exchange.

The company 鈥� one of the few Russian firms left on any of the world’s exchanges 鈥� noted that the development of charging infrastructure and an increase in consumer demand for sustainable transportation are fueling expansion in the EV market.

Rusal said its results were prepared assuming that it would continue as a going concern but warned that ongoing geopolitical uncertainty, including potential sanctions imposed by the United States, European Union and other countries, may result in “significant limitations”.

(By Rishav Chatterjee and Anastasia Lyrchikova; Editing by Alan Barona)

The request was circulated to World Trade Organization members on Thursday, it said.

Canada says the measures, which end Canada’s exemption from additional duties on some steel and aluminum products and increase duties on aluminum articles and which took effect on Wednesday, are inconsistent with US obligations under the General Agreement on Tariffs and Trade (GATT) 1994, the WTO said in a statement.

US President Donald Trump, speaking to reporters in the Oval Office on Thursday, suggested he was not going to change his mind on tariffs.

“We’ve been ripped off for years and we’re not going to be ripped off anymore. I’m not going to bend at all, aluminum or steel or cars,” he said.

The move follows a separate request by Canada on March 5 for consultations with the United States after Trump’s new 25% tariffs on imports from Canada and Mexico took effect, along with new duties on Chinese goods.

Trump has declared that the top three US trading partners had failed to do enough to stem the flow of fentanyl and its precursor chemicals into the United States.

(By Madeline Chambers and Olivia Le Poidevin; Editing by Thomas Seythal and Angus MacSwan)

Read More: Bad news for American beer drinkers as aluminum tariffs kick in

Now for the bad news. As of today they will be paying a 25% import tariff, not just for Canadian metal but for all aluminum products from all countries.

Market pricing has already shifted to reflect the Trump administration’s doubling-down on tariffs as a way of reviving domestic smelting capacity.

The CME Midwest premium , reflecting the cost of unwrought aluminum delivered to a US fabricator over and above the international London Metal Exchange basis price, is trading at record highs.

The high premium will flow down the aluminum product chain until it hits the last-stage user, whether it be Ford Motor, Lockheed Martin or one of the country’s many independent brewers.

That’s how tariffs have worked to date and things won’t change while the United States remains so dependent on imports.

Tariff hangover

Trump’s original 2018 tariffs on aluminum were set at 10% and within a year the Beer Institute, which represents the nearly 8,000 brewers in the United States, estimated they had already cost the industry an extra $250 million.

A report by consultancy Harbor Aluminum found that $50 million had gone to the US Treasury, $27 million to domestic smelters and $173 million to the fabricators who convert metal to aluminum sheet for beer cans.

What really irked the Beer Institute was that the import tariff was being passed through even though US cansheet typically contains around 70% recycled metal sourced domestically.

But that’s how tariffs tend to work.

Just ask European aluminum buyers. The European Union also imposes import tariffs ranging from 3% on primary aluminum to 6% on some alloys.

Researchers from the LUISS University of Rome studied the impact on consumers and聽in 聽found that even though duty-exempt metal accounted for around half of all European Union imports, everyone ended up paying 6% anyway.

Producers are incentivized to “align their prices to the highest possible level – that is, the duty-paid price,” the researchers wrote.

The Beer Institute’s follow-on , confirmed this harsh economic reality, finding that even with exemptions for key suppliers such as Canada, beer makers were still paying the full import tariff for their can metal. The cost at that stage had risen to $1.4 billion.

Import dependency

Harbor Aluminum’s finding that the main beneficiaries of tariffs to date have been first-stage processors reflects the imbalanced nature of the domestic US supply chain.

The country has a large base of semi-manufactured product makers but only four operating primary metal smelters to supply them.

The aluminum sector directly employs more than 164,000 workers but only 4,000 are engaged in upstream metal production, according to the US Aluminum Association.

Those four smelters produced 670,000 metric tons of metal in 2024, compared with US consumption of around 4.9 million tons.

Imports of primary metal totaled almost 4.0 million tons, of which 70% came from Canadian smelters.

It’s hard to see how that dynamic is going to change any time soon. Even if all the currently idled smelting capacity of around one million tons per year returned to production – a big “if” given the age and cost structure of the four mothballed plants – it would still leave a big import dependency gap.

Century Aluminum’s proposed new smelter is years away and the company hasn’t yet found a source of competitively priced power to feed the plant’s electrolysis process.

There is much more potential to lift domestic production from domestic scrap but as long as even one ton of extra imported metal is needed to meet domestic consumption, you can be sure that the tariffs will continue to determine the end price for American buyers.

Trading uncertainty

Moreover, as the markets learned on Tuesday, Trump is quite capable of raising tariffs on a presidential whim.

The changeable tariff rhetoric is causing volatility in the CME US premium, which briefly jumped to almost $1,000 per ton over the LME price on the threat of 50% tariffs on Canadian metal before retreating on news of the truce with Ontario Premier Doug Ford.

But it may also be about to generate a major realignment of global trading patterns.

Previous spikes in the US aluminum premium have pulled European premiums higher. This is logical given that Europe, which is also dependent on primary metal imports, must compete for spare units in the global market-place.

Not this time, though. Even as the US premium has surged to all-time highs, European premiums have been falling.

This is counter-intuitive, particularly since European consumers are set to lose Russian supply over the next year as part of the bloc’s latest sanctions package. If anything, the European premium should be even more sensitive to what is happening in the North American market.

The divergence suggests that some suppliers to the United States are already looking to avoid Trump’s tariff tantrums by re-directing sales to Europe.

If so, it will be good news for European beer drinkers, who may raise an aluminum can to their less fortunate American counterparts.

(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)

(Editing by Jason Neely)

Just hours after Trump’s 25% duties on all US steel and aluminum imports took effect, Trump said he would impose additional penalties if the EU follows through with its plan to enact counter tariffs on some US goods next month. “Whatever they charge us, we’re charging them,” Trump told reporters at the White House.

Trump’s hyper-focus on tariffs has rattled investor, consumer and business confidence and raised recession fears. He has also frayed relations with Canada, a close ally and major trading partner, by repeatedly threatening to annex the neighboring country.

Canada, the biggest foreign supplier of steel and aluminum to the United States, announced 25% retaliatory tariffs on those metals along with computers, sports equipment and other products worth $20 billion in total. Canada has already imposed tariffs worth a similar amount on US goods in response to broader tariffs by Trump.

“We will not stand idly by while our iconic steel and aluminum industries are being unfairly targeted,” Canada’s Finance Minister Dominic LeBlanc said.

Canada’s central bank also cut interest rates to prepare the country’s economy for disruption.

Trump’s action to bulk up protections for American steel and aluminum producers restores effective tariffs of 25% on all imports of the metals and extends the duties to hundreds of downstream products, from nuts and bolts to bulldozer blades and soda cans.

US Commerce Secretary Howard Lutnick said Trump would impose trade protections on copper as well.

A Reuters/Ipsos poll found 57% of Americans think Trump is being too erratic in his effort to shake up the US economy, and 70% expect that the tariffs will make regular purchases more expensive.

EU less exposed

The 27 countries of the European Union are less exposed, as only a “small fraction” of targeted products are exported to the United States, according to Germany’s Kiel Institute.

The EU’s counter-measures, due to take effect next month, would target up to $28 billion worth of US goods like dental floss, diamonds, bathrobes and bourbon – which likewise account for a small portion of the giant EU-US commercial relationship. Still, the liquor industry warned they would be “devastating” on its sector.

Nevertheless, Commission President Ursula von der Leyen said the bloc will resume talks with US officials.

“It is not in our common interest to burden our economies with such tariffs,” she said.

At the White House, Trump said he would “of course” respond with further tariffs if the EU followed through on its plan. With Irish Prime Minister Micheal Martin at his side, Trump criticized the EU member country for luring away US pharmaceutical companies.

China’s foreign ministry said Beijing would safeguard its interests, while Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said the move could have a major impact on US-Japan economic ties.

Close US allies Britain and Australia criticized the blanket tariffs, but ruled out immediate tit-for-tat duties.

Brazil, the No. 2 provider of steel to the United States, said it would not immediately retaliate.

Stocks steady, companies spooked

With Wednesday’s tariff increase well flagged in advance, global stocks were barely changed on Wednesday.

But the back and forth on tariffs has left companies unnerved, and producers of luxury cars and chemicals painted a gloomy picture of consumer and industrial health. More than 900 of the 1,500 largest US companies have mentioned tariffs on earnings calls or at investor events this year, according to LSEG data.

“We are in a trade war and when a trade war begins, it tends to sustain itself and feed itself,” Airbus CEO Guillaume Faury said on French television.

Shares in German sportswear maker Puma lost almost a quarter of their value after earnings underscored concerns that trade concerns are curbing American spending.

US steel producers welcomed Wednesday’s move, noting Trump’s 2018 tariffs had been weakened by numerous exemptions. The cost of aluminum and steel in the United States hovered near recent peaks.

JP Morgan’s chief economist forecast a 40% chance of a US recession this year and lasting damage to the country’s standing as a reliable investment destination if Trump undermines trust in US governance.

A steep US stocks selloff in March has wiped out all of the gains notched by Wall Street following Trump’s election.

Frayed relations with Canada

The escalation of the US-Canada trade war occurred as Prime Minister Justin Trudeau prepares to hand over power to his successor Mark Carney, who won the leadership race of the ruling Liberals last weekend.

“I’m ready to sit down with President Trump at the appropriate time, under a position where there’s respect for Canadian sovereignty and we’re working for a common approach,” Carney said while touring a steel plant in Ontario.

Other Canadian officials are due to meet with US officials in Washington on Thursday.

The US national anthem has been booed at hockey games and some stores removed US products from their shelves, even before the duties took effect. Travelers are steering clear of the United States, with bookings down 20% from a year ago.

Canadian Energy Minister Jonathan Wilkinson told Reuters that Canada could impose non-tariff measures such as restricting oil exports to the US or levying export duties on minerals if US tariffs persist.

(Reporting by David Lawder, Philip Blenkinsop, Andrea Shalal, Mark John, David Ljunggren, Jarrett Renshaw, Arathy Somasekhar, Shubham Kalia, Gnaneshwar Rajan and Renju Jose; Writing by Andy Sullivan; Editing by Lincoln Feast, Christina Fincher and Toby Chopra)

White House spokesman Kush Desai confirmed in a statement that the planned levies would come into effect from midnight on Wednesday, with no exemptions for any US trading partners.

Albanese told reporters after the announcement that the Trump administration鈥檚 actions were 鈥渆ntirely unjustified鈥� and an act of 鈥渆conomic self-harm鈥� on the part of the US. But, he added, Australia would not take any reciprocal measures.

鈥淭his is against the spirit of our two nations鈥� enduring friendship and fundamentally at odds with the benefits that our economic partnership has delivered over more than 70 years,鈥� Albanese said Wednesday in Sydney. Australia will continue to advocate for an exemption, he added.

President Donald Trump had told the Australian prime minister during talks by telephone last month that he would consider an exemption. Albanese, who must hold an election by May 17, had been under intense pressure from local lawmakers and executives to secure a carve out for Australia鈥檚 exports.

Albanese said after the announcement that he would be working with the steel and aluminum industries to diversify their exports, encouraging citizens to buy domestically produced products.

鈥淔riends need to act in a way that reinforces to our respective populations the fact that we are friends. This is not a friendly act,鈥� Albanese said Wednesday.

During Trump鈥檚 first term, Canberra undertook months of painstaking negotiations with Washington to secure an exemption. However, then-Prime Minister Malcolm Turnbull told Bloomberg this week that he believed it would be 鈥渁 lot harder鈥� for Australia to get a similar deal this time.

White House spokeswoman Karoline Leavitt had told reporters earlier that Trump had decided against giving an exemption, according to Australian media reports.

鈥淗e considered it, and considered against it,鈥� she told the Australian Broadcasting Corp., referring to Trump.

(By Ben Westcott)

鈥淧ursuant to his previous executive orders, a 25 percent tariff on steel and aluminum with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight, March 12th,鈥� White House spokesperson Kush Desai said in a statement.

Trump earlier Tuesday had suggested he would double the metal tariffs for Canada in retaliation for Ontario imposing a 25% surcharge on electricity sent to US states. That threat launched a market slide, intensifying weeks of volatility, and ramping up the cloud of uncertainty hanging over major North American industries.

Ontario Premier Doug Ford and US Commerce Secretary Howard Lutnick, though, announced the Canadian province would suspend its plans to slap a surcharge on electricity exports to the US. The pair plan to meet Thursday in Washington.

鈥淲ith any negotiation that we have, there鈥檚 a point that both parties are heated and the temperature needs to come down. And I thought this was the right decision,鈥� Ford told reporters. 鈥淭hey understand how serious we are about the electricity and the tariffs.鈥�

That appeared to largely diffuse Trump鈥檚 threat, with him telling reporters moments later that he would consider backing off the heightened tariffs on Canada.

The turmoil highlighted the erratic nature of Trump鈥檚 tariff threat, which have been subject to delays, exemptions and reversals. Tuesday鈥檚 chaos follows a familiar Trump playbook of making broad threats, only to later scale those back after extracting concessions from trading partners.

The back and forth marked the latest escalation in the trade dispute between the US and Canada, and risked further upsetting markets that have posted steady losses since the president moved forward last week with an initial round of tariffs on Canada and Mexico. US stocks pared back some of their earlier losses after Trump said he did not believe the US would see a recession; the S&P 500 Index closed down 0.76% in New York, while the Dow Jones Industrial Average fell 1.14%.

Tuesday morning Trump had also said he would 鈥渟ubstantially increase鈥� levies on Canadian automobile parts on April 2 if Ottawa does not drop tariffs on dairy products and other US goods. It鈥檚 unclear if Trump will follow through on those threats in the coming weeks.

Those levies would 鈥渆ssentially, permanently shut down the automobile manufacturing business in Canada,鈥� Trump said. The president on Tuesday reiterated his belief that Canada should become a part of the US, saying it would 鈥渕ake all Tariffs, and everything else, totally disappear.鈥�

Canada is the main source of aluminum for US industry, and several of the Ontario-based auto plants Trump is threatening to shut down are owned by US automakers.

Trump鈥檚 latest actions pose a test to the Canadian Prime Minister-Designate Mark Carney, who is set to replace Justin Trudeau.

鈥淧resident Trump鈥檚 latest tariffs are an attack on Canadian workers, families, and businesses,鈥� Carney earlier said, adding that his 鈥済overnment will ensure our response has maximum impact in the US and minimal impact here in Canada, while supporting the workers impacted.鈥�

Caught off-guard

The increasingly heated exchanges underscored the shifting and unpredictable nature of trade under the new administration and the extent to which they rest on the whims of the president. Industry experts supporting the steel and aluminum tariffs were taken off guard Tuesday morning, according to people familiar with the matter, indicating Trump had not widely discussed doubling tariffs on Canada on the eve of their implementation.

Trump鈥檚 trade fight is a stark departure from his first-term agenda, where tariffs were widely threatened but ultimately applied mostly to China and certain sectors, including steel and aluminum, said Marc Short, who served as chief of staff to Vice President Mike Pence in Trump鈥檚 first term.

鈥淚 think it鈥檚 dramatically different than the first administration, and I think one of the biggest challenges is markets look at it and say, you know, this is just part of his bluster, right?鈥� Short said in an interview. 鈥淚 think markets just assumed it would be the same, that it鈥檚 just negotiation, and it鈥檚 not.鈥�

鈥淭here is nothing that has benefited the Liberal Party of Canada more than the president鈥檚 trade policy,鈥� Short said.

Early in his term, Trump imposed 25% duties on Canadian and Mexican goods, only to subsequently delay the move for one month. When the tariffs went into effect last week, the US president within days moved to exempt products covered under USMCA, a North American free trade agreement he negotiated during his first term, after markets dropped and at the urging of US auto manufacturers.

Another planned wave of tariffs could hit as soon as April. Trump plans to impose 鈥渞eciprocal鈥� duties that he considers equivalent to countries鈥� tariffs, non-tariff barriers and certain taxes, including Canada鈥檚 5% general sales tax, which is applied to nearly all purchases domestically. Trump has regularly complained about Canada鈥檚 dairy tariffs, which are a part of the country鈥檚 protected system of production quotas, known as supply management.

Canadian response

Ontario鈥檚 energy taxes would have put price pressure on Americans whose budgets are already strained by persistent inflation.

Canada鈥檚 federal government has also imposed tariffs on items like American orange juice, footwear and motorcycles.

Ford, one of the country鈥檚 prominent conservative politicians, enacted the electricity tariffs amid widespread outrage in Canada over Trump repeatedly suggesting that the US should annex Canada. Ford said Tuesday that while he wanted to maintain electricity flows to the US, he would not hesitate to cut off exports if Trump continued the trade war.

鈥淚s it a tool in our tool kit? 100%,鈥� Ford said in an interview with CNBC.

(By Jordan Fabian, Josh Wingrove and Jennifer A. Dlouhy)

The doubling of levies, in response to the Canadian province of Ontario placing a 25% tariff on electricity coming into the US, take effect from Wednesday.

Consumers buying aluminum on the physical market typically pay the London Metal Exchange (LME) benchmark aluminum price plus a premium that covers taxes, transport and handling costs.

Traders predict premiums will continue to rise as producers pass on as much of the extra costs of tariffs as they can.

Canadian smelters account for most primary and alloyed aluminum shipped to the United States. Aluminum is vital for the transport, packaging and construction industries.

About 70%, or 3.92 million metric tons of the primary and alloyed aluminum exported to the United States last year, came from Canada, according to information provider Trade Data Monitor (TDM).

The 25% tariff originally planned would have meant the premium would have had to rise to 47 cents a lb or more than $1,000 a ton to cover the extra costs for sellers, analysts have calculated.

The US Midwest duty-paid aluminum premium jumped to 45 US cents per lb, or more than $990 a metric ton, on Tuesday, a jump of nearly 20% from Monday. It has climbed more than 70% since the start of 2025.

During his previous presidency, Trump in 2018 sought to use tariffs on aluminum to encourage investment in capacity.

Given that aluminum smelters take longer to build than political election cycles, analysts were sceptical investors would be confident to spend the large capital sums needed.

“US primary aluminum production has experienced a sequential decline over the past two decades due to often thin or negative margins, and the implementation of tariffs in 2018 has not sustainably helped local supply to recover,” Macquarie analysts said in a note last month.

While premiums for US buyers have risen, industry sources have said they are likely to continue falling elsewhere as aluminum produced in countries where import levies apply are diverted.

In Europe, the duty-paid physical market premium has dropped to $240 a metric ton, the lowest since January last year. It has fallen more than 35% since the start of 2025.

(By Pratima Desai; Editing by Eric Onstad, David Goodman and Barbara Lewis)

鈥淚鈥檒l let you know about it,鈥� Trump told reporters at the White House on whether the potential 50% duties on aluminum and steel would be implemented as planned on Wednesday. They had been planned at 25%, but Trump doubled them when Ford responded on Monday.

Trump referred to Ford at different times as 鈥渁 very strong man in Canada,鈥� and 鈥渁 gentleman鈥� who was 鈥渘ice鈥� to have called and had his 鈥渞espect.鈥� Ford, though, said it was U.S. Commerce Secretary Howard Lutnick who had called him.

Speaking to reporters in Toronto on Tuesday afternoon, Ford characterized the call as an olive branch and they agreed to meet on Thursday in Washington. The premier is to be accompanied by Federal Finance Minister Dominic LeBlanc. Ford said he鈥檇 agreed to temporarily suspend the tax, a tool his government would 鈥渁lways have鈥� in its tool kit.

鈥淭his was the right decision,鈥� he said. 鈥淭hey understand how serious we are about the electricity and the tariffs, and rather than going back and forth and and having threats to each other, we have both agreed that cooler heads prevail.鈥�

Canada is by far the top supplier of both steel and aluminum to the United States. The neighbouring country exported $9.4 billion (C$13.6 billion) worth of aluminum to the U.S. in 2024, according to MarketWatch, significantly ahead of the second-largest exporter, the European Union, which exported $1.5 billion. Canada also exported $7.1 billion worth of steel last year, compared to $7 billion from the European Union.

Stocks slump

Stocks markets have slumped in response to the uncertainty. On Monday, the Dow Jone Industrial Average dropped 890.01 points or 2.1% to close at 41,911.71. The DJIA fell an additional 478.23 points 1.1%, closing at 41,433.48. 鈥婩rom March 7 to 11, the DJIA declined by 1,368.24 points, a drop of about 3.2%.

In Toronto, the S&P/TSX Composite Index decreased by 378.05 points or 1.5% to close at 24,380.71. The index fell an additional 132.51 points 0.5% on Tuesday to close at 24,248.20. 鈥�

Trump had earlier stated in a post on Truth Social that he had instructed Lutnick to impose an additional 25% tariff, set to take effect Wednesday morning.

Trump, in front of the White House on Tuesday where he apparently bought a Tesla from Elon Musk to support the company鈥檚 sagging share price, also repeated his case for Canada to join the U.S.

鈥淐anada would be great as our cherished 51st state,鈥� the president said. 鈥淵ou wouldn鈥檛 have to worry about borders, you wouldn鈥檛 have to worry about anything. And by the way, Canada is very highly taxed, and we鈥檙e very low tax.鈥�

Who鈥檚 subsidizing whom?

Trump also repeated the claim that the U.S. subsidizes Canada by over $200 billion annually.

However, economist Jim Stanford, director of the Centre for Future Work in Vancouver, disputed these figures in an article  last month by the University of British Columbia. According to U.S. data, the bilateral trade deficit was $40 billion in 2023, down 29% from 2022, with a further 9% decline in the first nine months of 2024.

鈥淐ompared to a two-way trade flow of almost $1 trillion per year, this imbalance is puny,鈥� Stanford said.

He also noted that the U.S. enjoys a surplus in services trade and investment income from Canada, which helps offset any trade deficit.

鈥淢ost Canadian exports to the U.S. are unfinished inputs that American businesses rely on for production,鈥� he said. 鈥淭ariffs would increase costs for these materials, reducing U.S. firms鈥� competitiveness in both domestic and export markets.鈥�

US prices for the three key industrial raw materials have been ratcheting higher for weeks, partly driven by manufacturers鈥� efforts to build up stocks before US President Donald Trump imposes tariffs on the metals. In the process, they鈥檝e decoupled from prices that manufacturers are paying in other major industrial economies including China, Germany and Japan.

For aluminum consumers, prices to get spot supplies are about 23% higher than in Europe. Steel prices are about 40% more 鈥� exceeding the 25% levy that Trump plans to slap on both metals on Wednesday. In the copper market, where tariffs could be months away, US manufacturers are already paying about 10% more than European buyers, according to Bloomberg calculations.

Such extra charges don鈥檛 take into account Trump鈥檚 Tuesday announcement that he鈥檇 boost tariffs on Canadian steel and aluminum to 50% on March 12 to retaliate against Ontario鈥檚 move to raise taxes on electricity sent to the US.

The surcharges have upended global metal markets as traders rushed to lock in profits by shipping cargoes to the US before tariffs are imposed. But for manufacturers, the anticipatory spike in prices fueled by Trump鈥檚 trade agenda has created significant commercial headwinds that risk leaving them at a growing disadvantage to rivals abroad.

鈥淐ustomers are concerned, and they鈥檙e all wondering how the costs are going to affect their end products,鈥� said Dan Markham, president of Markham Metals Inc., a Wilmington, Massachusetts-based manufacturer and distributor of aluminum and steel. The executive said he鈥檚 already seeing higher prices, and they鈥檙e getting passed along. 鈥淥ur customers pay more.鈥�

Aluminum premiums, which consumers pay over and above exchange prices, have soared to record highs in the US. That means that the price of a standard aluminum ingot for US buyers has jumped 20% since the start of the year to the highest in nearly three years, even as prices in Europe have been broadly flat.

For American steel, the benchmark price touched more than $900 a ton at the end of February, and is up more than 30% this year, in anticipation of a tariff on foreign supplies. Trump sees such tariffs as boosting American production in the long term, though there鈥檚 mounting evidence that consumers will be footing the bill in the short term.

鈥淵ou鈥檙e going to see this surge in prices in the near term and that will incentivize US steel production and higher prices,鈥� Hamad Hussain from Capital Economics said in an interview. 鈥淵ou鈥檙e going to see this higher price surge, then prices will level off along the way.鈥�

Trump鈥檚 plan to impose tariffs on steel and aluminum imports is unlikely to arrest decades of declining market share and stagnating production, if the past is any guide. The materials were among Trump鈥檚 earliest tariffs during his first term, implementing a 25% duty on steel and a 10% duty on aluminum in 2018. Since then, there has been little change in American steel output while US aluminum production has further declined amid idling of domestic smelters.

The flow of copper around the world is already being altered by Trump鈥檚 tariff threats, even though the wiring metal is not on the tariff list yet. The US president in late February ordered the Commerce Department to conduct a probe into possible tariffs on national security grounds. Such investigations typically take months.

Goldman Sachs Group Inc. analysts expect all forms of copper shipped to the US to be hit with a 25% tariff, keeping prices on New York鈥檚 Comex trading at a hefty premium over other benchmarks.

The import tariff is expected to 鈥渇ully pass through into US domestic prices, with Comex to trade at a sustained premium鈥� to the London Metal Exchange, analysts led by Eoin Dinsmore said in a March 1 note.

(By Yvonne Yue Li and Jack Farchy)