Trump’s Return Raises Concerns Over Trade Policies and Alumina Pricing Volatility
Donald Trump's return to the White House after defeating Kamala Harris has generated waves of speculation across various economic sectors, including significant interest from the aluminium industry. Now serving as the 47th President of the United States, Trump’s history of implementing protectionist policies is making industry experts wary of potential shifts under his new administration. During his previous tenure from 2017 to 2021, his administration imposed harsh tariffs as part of the "America First" agenda, targeting goods such as steel and aluminium. Many are now closely watching how he will approach international trade relations, particularly with regard to tariffs, import-export regulations, and strategic partnerships within the aluminium market.
The recent surge in alumina prices, as reported by the Shanghai Metals Market, is seen as both an indicator of current market conditions and a potential consequence of Trump's return. Alumina prices recently reached RMB 5,391 per tonne (USD 752), marking their highest point since early September. This price rise correlates with disrupted supply chains affecting raw materials for aluminium production. Industry experts suggest that Trump's presidency could amplify these conditions, leading to further uncertainty for aluminium producers globally.
On the supply side, Australia's Metro Mining reported record bauxite shipments of over 793,420 tonnes for October 2024, achieving 69.5% of its annual target. However, these achievements come amid concerns over supply disruptions, such as Alcoa's halt of bauxite shipments from Brazil’s Juruti port due to vessel availability issues, which highlights the unpredictable nature of the global market.
Domestically, Trump’s strategy could have significant impacts on aluminium production. Recent declines in production across North America during August and September 2024 have raised concerns about how his anticipated policies might affect the industry. With global pressures on output capacity mounting, aluminium producers are bracing for potential changes that could reshape the sector.
Financial markets have also reacted strongly to Trump's election victory. Investor sentiment shifted notably, with significant economic moves, including Elon Musk's heavy investment—reportedly \$130 million —during Trump's campaign. Following the election results, Musk's wealth surged by \$26.5 billion as Tesla shares spiked. This raises questions about how Trump's administration might align with Musk's interests, particularly in the electric vehicle and space exploration sectors.
Trump's return has also rekindled discussions on cryptocurrency, especially regarding his potential embrace of Bitcoin as a national digital currency. Trump's relationship with Musk may play a role in shaping the future of cryptocurrencies, with speculation that his administration could bring more regulatory clarity to Bitcoin, potentially moving it toward wider mainstream acceptance.
Overall, Trump's presidency is expected to send ripple effects across international relations and economic policies, with significant implications for trade and markets like aluminium, which were heavily impacted by tariffs during his last term. The American aluminium sector must prepare for potential volatility, as new strategies could lead to extended periods of instability. With record-high alumina prices and decreasing domestic output, aluminium producers are already feeling the pressure to adapt to these evolving circumstances.
Trump's policies will likely influence trade behaviors and economic sentiments globally, and aluminium producers are looking for clarity and strategic guidance from the new administration. The industry is hopeful for more predictable conditions to navigate production, transportation, and resource management challenges during what could be another turbulent term.
