Core Viewpoint - The tariffs imposed by the Trump administration on imported aluminum have failed to revive domestic aluminum production, leading to increased costs for American consumers and closures of local smelters instead of restarts [1][6]. Group 1: Impact of Tariffs - The 25% aluminum tariff has significantly affected the physical market, with regional delivery premiums reflecting the tariff costs, despite the London Metal Exchange providing benchmark aluminum prices [1]. - European aluminum premiums have decreased by over 30% year-on-year, highlighting the price disparity caused by U.S. trade policies [5]. - The CFO of Norsk Hydro indicated that the costs from tariffs will ultimately be passed on to downstream users, likely resulting in higher prices for American consumers [5]. Group 2: Energy Costs and Production Challenges - High energy costs, particularly electricity prices in the U.S., are a major barrier to the revival of the energy-intensive primary aluminum smelting industry [6]. - The cost of electricity for aluminum production in the U.S. is approximately $550 per ton, significantly higher than Canada’s $290 per ton, which hampers competitiveness [6]. - Recent industry developments include the permanent closure of Alcoa's Intalco smelter due to a lack of competitive power supply, and Century Aluminum temporarily idling its smelter in Kentucky due to soaring energy costs [9]. Group 3: Market Dynamics and Price Effects - The tariffs have led to a restructuring of trade flows, with Canadian producers shifting to European markets in response to U.S. tariffs, which has allowed European metals to fill the gap in U.S. demand [10]. - The increase in Midwest aluminum premiums due to tariffs has also raised scrap aluminum prices, indirectly passing costs onto downstream customers [10]. - The construction sector, which is experiencing weak demand, is particularly affected, as the rising costs are reflected in the performance guidance of companies like Hydro, indicating a soft spot in their extrusion products segment [10].