00:00This is a story about trying to have it both ways.
00:03Since he first became president,
00:05Donald Trump has sought to protect the U.S. aluminum industry through tariffs.
00:08But the war in Iran may be taking us in a very different direction.
00:13Our colleague Chrystia Freeland tells us a story of a key metal that is caught in the middle.
00:20Aluminum foil keeps foods from drying out while sealing in all their natural flavor.
00:28When you think about aluminum, the first thing that comes to mind might be tinfoil or soda cans.
00:33But it's also an essential component of cars, planes and machinery.
00:38It's the world's most abundant metal.
00:40But even that hasn't kept aluminum safe from the fallout of war.
00:44The supply is now depleted by about half of the metal that used to be shipped from the Middle East
00:52because there's been some damage and there's been some curtailments
00:55to avoid further damage.
00:58Jean Simard is the president and CEO of the Aluminum Association of Canada.
01:03It's a very significant situation for the aluminum sector worldwide
01:08because the Middle East produces 20% of all the aluminum outside China.
01:14And it ships to Asia, but mostly to the U.S. and to Europe.
01:18Of the top aluminum-producing countries in the world, two are in the Middle East.
01:24And Simard says the impact of the war in Iran could be long-lasting.
01:29Starting at the beginning of the crisis, the first curtailment happened in Qatar
01:34because of an energy supply situation.
01:37And then damage was done in Bahrain and then to the Altawila smelters in the Emirates.
01:45This is very significant because it will take a long time to bring it back.
01:53Smelters are very highly impacted by energy.
01:59And to restart a smelter, you have to do, like, if there's a supply problem with electricity for your house,
02:07you have to unplug everything and then replug one at a time.
02:11So they can only start back two cells a day out of hundreds and hundreds of cells.
02:17Production is just one part of the aluminum supply chain facing disruption.
02:21Distribution is another.
02:22Like so many of the world's exports, aluminum needs to be shipped, often a long way.
02:28And shipments are snarled by the blockade of the Strait of Hormuz.
02:32The problem is what's in front of us.
02:35The last ship to leave the Middle East just before the beginning of the crisis has made it to the
02:42U.S.
02:43There's no other ship on its way.
02:44It took 60 days to get there.
02:46So the full shock is ahead of us.
02:49I'm not too sure that all downstream transformers, processors, mom-and-pop shops that use aluminum are fully aware of
02:58what's ahead of them.
02:59In the first two weeks of the war, the price of aluminum on the London Metal Exchange saw double-digit
03:04gains, shooting to record highs.
03:07But while the war added to rising prices around the world, some of the fallout in the U.S. is
03:12self-inflicted.
03:13Last year, President Trump hiked tariffs on imports of aluminum to 50 percent, with the intention of stimulating domestic production.
03:22As of 2025, the U.S. was dependent on imports to meet some 60 percent of internal aluminum consumption.
03:29And that was something that the Trump administration didn't like.
03:32The U.S. is a short market on primary aluminum.
03:36So the U.S. need to import a lot of primary aluminum to fill demand.
03:40So to attract that metal, then U.S. consumers or manufacturing using aluminum, in effect, how to pay the duty
03:52on aluminum into the U.S. market.
03:54Trond Olaf Kristoffersen is the CFO of Norse Hydro, a publicly traded aluminum producer based in Norway.
04:00The company is also in the unique position of having a production facility in Qatar.
04:04Our joint venture in Qatar, Kataluma, has been impacted by the war and is currently operating around 60 percent production
04:14capacity because of the situation.
04:18And we continue to operate around that level.
04:21It is a challenging situation with the raw material access and also to get metal out from the region.
04:28But we are continuing to operate at that production level.
04:32And so is the U.S. now facing more of an aluminum crisis than other parts of the world?
04:39Well, the supply situation, I think, is or the situation in Mid-West impacts the supply situation in all markets.
04:48Physically, when it comes to supply, I think the Asian market is worse impacted because quite a lot of the
04:55metal from the Middle East is normally sold in Asia.
04:58Around two and a half million tons.
05:00But the price impact is global.
05:03This isn't the first time the United States has imposed tariffs on Canadian aluminum.
05:08In 2018, when I was foreign minister, the trade spat between our two countries ended with the U.S. backing
05:14down.
05:14And although the U.S. is facing higher aluminum prices today, Samard says that's not a direct effect of the
05:22war in Iran.
05:23That's because the vast majority of aluminum the United States imports comes from Canada.
05:28When the tariffs, the 50 percent tariff were implemented, it created a price shock in the market for exporters into
05:39the U.S., as Canada is one of them.
05:41And basically, the reaction was to divert shipments to another market, which covered the full logistical costs and the whole
05:52netback that would differentiate this destination from the U.S.
05:56One thing is sure, if you want to get all the available supply from Canada, you have as a policymaker
06:03in the U.S. to do a carve-out for Canada within the global tariff situation right now.
06:10If that doesn't happen, Canada will go where the market is.
06:16Among the industries that are most affected by higher aluminum prices are packaging and transportation, from trains and trucks to
06:24mopeds and bikes.
06:26And that's where Brendan Moore comes in.
06:28Fundamentally, aluminum is one of the primary materials used on a bicycle.
06:32The reason is it's very light, very strong, reasonably priced.
06:38You know, it's not a super exotic metal.
06:40Moore's company, Wolf Tooth Components, makes premium bike parts that are shipped all over the world.
06:45His manufacturing plant in the suburbs of Minneapolis is about 7,000 miles from the Strait of Hormuz.
06:51But he's still feeling the consequences of the war in Iran.
06:55We're a small company like us.
06:57We're not Boeing, so we don't get to say, Kaiser, send us 10 truckloads of aluminum.
07:01We buy our aluminum through suppliers locally.
07:04And those suppliers will source that from various suppliers around the world.
07:09We don't get a lot of choice in where our aluminum comes from, but I can tell you that it's
07:14shifted.
07:14And we do have a preference for U.S. aluminum.
07:17Eventually, the only solution for a manufacturer like Moore might be to raise prices.
07:22But he says it's not so simple.
07:24In consumer goods, I would say it's not like when you go to the restaurant and there's, like, lobster pricing
07:30and it's, like, market rate.
07:31That's not how consumer goods work.
07:34And when prices of aluminum or raw material go in, we can't necessarily just, like, raise our prices right away.
07:42Raising prices, remember, does three really bad things.
07:44One, it upsets your customers, two, it puts you at a disadvantage to your competition, and three, it's actually a
07:54lot of work.
07:54And so, when the aluminum goes up effectively initially, we just eat it.
07:59It just comes right out of our bottom line.
08:02Moore has seen peaks and valleys in the price of aluminum before.
08:05But he says this time is different.
08:08If you look, there was COVID, which aluminum prices started going up.
08:12But then, actually, the biggest peak was right when the Russian war started.
08:16Just went crazy high.
08:18And then tariffs came in.
08:21And then the Strait of Hormuz was closed.
08:24But the biggest thing people aren't talking about, and you're seeing this broadly across commodities,
08:28is the AI buildout is actually one of the big impacts for aluminum prices going up right now.
08:33Those data centers that we all hear so much about, they use a ton of raw material.
08:37And a lot of it's aluminum.
08:39And so, kind of, we're seeing, like, a triple whammy now, if you will.
08:43Smaller manufacturers, like Wolf Tooth Components, not only have to contend with higher prices for the metal they need,
08:49but also have to compete against bigger, more powerful players that also use aluminum.
08:55The squeeze could eventually raise prices across the board for consumers, triggering another bout of inflation.
09:01There's really no viable alternative to aluminum in our case.
09:07And you'd hear the same thing if you asked Boeing.
09:09Like, they're still going to use tons of aluminum in the airplanes, no matter what the price is.
09:13And the price of those airplanes will just go up.
09:16Same with our bicycle parts.
09:17As the war drags on, so does the timeline for prices to stabilize.
09:21Back in Norway, Christofferson says the outlook is far from certain.
09:25So, in the aluminum market, I think we see a bit the same situation as you see in the energy
09:31markets,
09:31where you have quite high prices in the front end, meaning metals to be delivered in the coming month.
09:38But then you have a declining price, a backwardation situation in the market,
09:43with lower prices falling down to $3,000 per ton a couple of years out in time.
09:49So, it will take anywhere between 12 to 18 months for the Middle East supply that's been affected to come
09:58back into the market.
09:59And then you need 60 days to ship to North America that you add to this.
10:05So, we're heading for a supply shock as we move through the summer period.
10:11And this will last most likely for about a year, a year and a half, until this supply starts to
10:19make its way back into the market.
10:22For business owners like Brendan Moore, the effects of domestic and foreign policy have become an unavoidable hazard of the
10:29job.
10:29We control the processing.
10:31We control our efficiency.
10:32We control our yields.
10:33So, we have to just focus on those.
10:35I think near term, we're going to be able to mitigate most of the aluminum prices.
10:39Longer term, if it stays this high, there has to be some sort of increase.
10:44But a consumer, if aluminum goes up 20% again this year, our prices of our products aren't going to
10:50go 20%.
10:51They're going to go up like 3% or 5%.
10:53And I like Boeing.
10:55I mean, I'm not trying to poo-poo them at all.
10:56But, like, we don't have the negotiating power that, say, they have or an automaker has.
11:01And when these prices change or tariffs change, I see that almost the same day.
11:07I mean, not joking sometimes.
11:08Well, I didn't start this small business because I wanted to learn about tariffs or deal with massive supply chain
11:15issues or deal with geopolitics.
11:19Those are, in fact, some of my least favorite things.
11:21Bicycles are way more fun than that stuff.
11:23With all the back and forth of tariffs and wars, it's hard to see how U.S. policy, at the
11:29moment, is helping American manufacturers or American consumers.
11:34And this is one problem that the marketplace can't fix on its own.
11:38It's just that caused distributors, and the terminal could be more fun than that stuff.
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