Could Canada fully supply the U.S. with aluminium?

Canada's aluminium output could not fully satisfy U.S. demand, even if every domestic production was redirected south of the border, according to Morgan Stanley's research. The U.S. relies heavily on imports for 80% of its aluminium consumption, with Canada being its primary supplier. In the first half of 2026, the U.S. imported 1.68 million tonnes of aluminium, equivalent to 280,000 tonnes per month.

Meanwhile, Canada exported 1.16 million tonnes during the same period, averaging 192,000 tonnes per month and fulfilling approximately 68% of U.S. import requirements. Canada's total aluminium production reached 1.6 million tonnes, representing about 95% of American import needs. To meet the remaining demand, the U.S. would need aluminium from other countries.

Morgan Stanley noted that if the U.S. reduced tariffs on Canadian aluminium to 25% from 50%, Canadian producers might be incentivized to ship metal to the U.S. instead of Europe, where shipments are duty-free. Nevertheless, the remaining tonnage required by American buyers would still have to come from a country facing the 50% tariff.

Morgan Stanley suggested that the U.S. Midwest aluminium premium would likely persist, trading around 30% above the tariff cost due to competition with European buyers for Canadian metal. If Canada's tariff were reduced, this competition could decrease, leading to a modest decline in the Midwest premium. Morgan Stanley estimated that the premium could lose roughly half its current excess over tariff-based fair value, which translates to about 10 to 12 cents per pound.

European premiums might benefit from the shift of Canadian shipments back to the U.S., although recovering Middle Eastern supply could limit this potential impact. Moreover, American suppliers could access tariff discounts for companies expanding their domestic capacity. Emirates Global Aluminium and Century Aluminum are planning to establish a new 750,000-tonne-per-year smelter in the U.S.