Why Aluminum Prices Are Rising

Have you noticed that the price of aluminum has been rising as of late?

Unlike with other commodities like oil, the price of aluminum is determined by multiple factors beyond simply the cost of the raw material.

One of the primary drivers is a rising cost of the S&P Global Platts Midwest Premium, which is a regional differential to the global price of aluminum and impacted by the regional cost of logistics.

Canada, which is a major importer of aluminum to the U.S., was originally exempt from Section 232 tariffs. But that was with the understanding that they wouldn’t increase exports in a meaningful way. That didn’t happen. And the result was a rising premium.

In fact, three primary factors are considered when determining the price of aluminum.

Ingot

Ingot is metal in its rawest form; a relatively pure piece that will eventually be cast into a shape suitable for further processing.

Premium

The S&P Global Platts Midwest Premium is a regional differential to the global price of aluminum. It is impacted by the regional cost of logistics, and supply and demand conditions.