le East, which accounts for 9 per cent of global aluminum smelting capacity, has upended trade flows far beyond the Gulf, industry sources told Reuters. An ensuing tug-of-war is playing out in regional physical market premiums US and European buyers pay above the London Metal Exchange benchmark for aluminum, which is used in everything from cars and beer cans to building materials. “We are in a situation where the Europeans and the Americans are competing for limited aluminum units,” said Bank of America analyst Michael Widmer. Duty-paid aluminum premiums in Europe have surged 73 per cent since the start of the Iran war to a record $621 a metric ton earlier this month, while the US Midwest premium last week hit an all-time high of $1.16 per lb, or $2,557 a ton. Gregory Wittbecker, president of Wittsend Commodity Advisors, estimates the US Midwest premium needs to rise to at least $1.20 a lb, or $2,645 a ton, for Canadian producers to divert supply back from Europe. With LME prices around $3,670 a ton, US consumers are paying $6,200 a ton for their aluminum while in Europe the cost has jumped to $4,300 a ton. “The European premium is an incentive for Canadians to push metal east,” said Wittbecker. Netbacks make EU attractive The US was traditionally the default destination for aluminum from Canada, which exported a total of nearly 2.6 million tons of unwrought aluminum metal and alloys last year, Trade Data Monitor figures showed. But after US President Donald Trump imposed tariffs on imports, Canadian producers began to divert metal to Europe. TDM data shows Canadian aluminum accounted for 54 per cent of US imports in the first quarter of this year, down from 63 per cent in the same period last year and 75 per cent in the first three months of 2024. One reason for this is the so-called netback to producers, which refers to the profit actually made after deducting transport, tariffs and other costs from the selling price. “When comparing US and EU prices from an export perspective, one has to shave off the portion going to the US Treasury in tariffs to get to comparable netbacks,” Jean Simard, president of the Aluminium Association of Canada, told Reuters. “This is why the EU option remains attractive to Canada, adding pressure on the US market,” Simard added. Canadian aluminum exports to the European Union ranged between 6 per cent and 40 per cent of the monthly totals between April 2025 and March 2026, compared with near zero in the first quarter of last year, TDM data showed. Data for Canada’s April aluminum exports is not yet available, but industry sources expect it to confirm the trend of rising exports to Europe and falling shipments to the US. Europe’s aluminum deficit Bank of America’s Widmer estimates Europe faces a 5.6 million-ton aluminum deficit in 2026, versus a global shortfall of 2.2 million tons and a 3.8 million-ton US deficit. Last year, Europe imported around 1.3 million tons or 21 per cent of its primary and alloyed aluminum from the Middle East, TDM data shows, and its loss comes in addition to the phasing out of Russian aluminum by the EU and the mothballing of South32’s Mozal smelter in Mozambique. Even before the Iran war began with US-Israeli strikes on February 28, Canadian shipments to Europe jumped 276 per cent from 2024 levels to more than 590,000 tons last year, while deliveries to the US fell 25 per cent to around two million tons, TDM data shows. Reporting by Heejin Kim and Yun-ji Ha. Editing by Brenda Goh and Clarence Fernandez. All courtesy of Reuters. Further reading: On posts record Q1 revenue despite mounting tariff pressures