Arconic Hunts for Aluminum Discount Amid Tariffs

Arconic Corp. is seeking approximately 90 million pounds of aluminum on the spot market for the second quarter. This represents a notable deviation from the company's historical practice of securing most raw materials through annual contracts. The substantial volume Arconic aims to acquire, equivalent to about 10% of US monthly consumption, is poised to exacerbate existing supply shortages.

The company's atypical strategy suggests an effort to secure the metal at a discount, aiming to mitigate the impact of President Trump's tariff measures. These tariffs have significantly increased the cost of imported aluminum, forcing Arconic to adapt its procurement to protect profit margins and manage pricing.

The US aluminum market has experienced volatility due to trade policies, with domestic prices outstripping global benchmarks. The US Midwest premium, a key indicator, recently reached an all-time high of $1.03 per pound. Arconic's substantial spot market purchase, if successful, would likely further squeeze American consumers already facing limited supply, as exchange inventories have been depleted since October.

Arconic has secured roughly half of its required 2026 tonnage through yearly contracts. It plans to use the spot market for similar volumes in the third and fourth quarters to meet its remaining feedstock needs for the year.