Aluminum pricing overhaul planned by US regulator
The Commodity Futures Trading Commission is planning to overhaul aluminum pricing in the United States, according to Chairman Michael Selig. The agency is investigating whether new contract structures could enhance market transparency. Aluminum is crucial to various industries such as automotive, aerospace, packaging, construction and defense, making its price volatility a significant concern for the broader economy.
US consumers generally pay the benchmark aluminum price on the London Metal Exchange, plus a Midwest premium, which comprises freight, insurance and taxes. The Midwest premium peaked at $1.19 per pound, or around $2,620 per metric ton, in early June, more than double the figure from the previous year. This surge coincided with a 50% tariff on US aluminum imports imposed by President Trump in 2020 to boost domestic production.
The combined price for US consumers exceeded $6,000 per ton, driven by shortages in the Middle East, which caused London Metal Exchange aluminum to reach four-year highs above $3,700. Selig has directed the global markets team to examine the current pricing mechanisms and devise specific reforms to safeguard US markets and American manufacturers.
He made these remarks at the annual Beer Institute meeting, attended by businesses that utilize aluminum for beverage cans.
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