Donald Trump's stunning return to the White House after defeating Kamala Harris has sparked waves of speculation across various sectors of the economy, including significant interest from the aluminium industry. Now serving as the 47th President of the United States, Trump’s past record of economic policies is making industry experts nervously predict the potential shifts under his administration. When he previously held office from 2017 to 2021, his administration implemented harsh tariffs as part of the "America First" agenda, targeting various goods including steel and aluminium. This time around, many are watching closely to see how he will approach international trade relations and economic measures, particularly protectionist policies concerning trade tariffs, import-export regulations, and strategic partnerships within the aluminium market.
The recent surge in alumina prices, reported by the Shanghai Metals Market, serves as both a sign of current market conditions and as evidence of potential ramifications of Trump's return. The average alumina price recently hit RMB 5,391 per tonne, marking the highest it has been since the beginning of September. Interestingly, this price jump correlates with disrupted supply chains affecting aluminium raw materials. Industry experts believe Trump's presidency could exacerbate these conditions, creating uncertainty for aluminium producers worldwide.
On the supply front, Australia’s Metro Mining has achieved remarkable success, reaching record bauxite shipments of over 793,420 tonnes for October 2024, meeting 69.5 percent of their annual target. This coinciding with alarming news of supply chain disruptions from Alcoa, which has halted bauxite shipments from Brazil’s Juruti port due to upcoming vessel issues, underlines the unpredictable nature of the current global market.
Trump's strategy could also have ramifications for domestic aluminium production. While the production levels were relatively stable, production dipped slightly across North America during the months of August and September 2024. This decline is raising eyebrows as the industry braces for possible repercussions from Trump's anticipated policies, making producers concerned about their output capacity amid increasing global pressures.
Meanwhile, the financial markets are attempting to navigate the return of Trump, and investor sentiment has shifted accordingly. Trump’s election victory saw significant economic reactions, especially from notable figures like Elon Musk. Musk, who invested heavily - to the tune of $130 million - during Trump's campaign, saw his wealth soar by $26.5 billion as Tesla shares surged following the election results. This notable rise raises questions about how Trump's administration might cater to Musk's interests across electric vehicles and space exploration.
The cross-section of cryptocurrency and traditional finance appears poised for change as well. Trump's overtures toward embracing Bitcoin as the US's digital currency have instigated discussions on his potential relationship with Elon Musk, which could bring forth new shifts within the cryptocurrency market. Supporters are speculating whether Trump’s policies will banish the so-called ‘Wild West’ image associated with Bitcoin, leading it toward wider acceptance.
With economic matters intertwined with international relations and domestic policies, Trump's presidency is set to initiate ripple effects through numerous sectors. Progressive tariffs against imports and changing regulations could significantly reshape the market balance for products like aluminium, which faced steep tariffs during his last term.
The American aluminium sector will need to brace for potential changes as Trump's strategies could lead to extended periods of volatility. With record-high alumina prices along with low domestic output, companies are already feeling the pressure. Adaptability will be key as they navigate their production, transportation, and resource management amid what many believe could be another turbulent term under Trump.
The repercussions of Trump’s policies extend beyond borders, influencing trade behaviors and economic sentiments globally. For their part, aluminium producers are hoping for clarity and strategic guidance, traits they believe will be central to potential collaboration with the new administration.
