Summa Silver Corp. (TSXV: SSVR, OTC: SSVRF, FRA: 48X)
Silver Lives Here
As U.S. President Donald Trump imposes comprehensive tariffs, U.S. metal buyers are seeking to circumvent these tariffs by looking for more aluminum from the Middle East and India, as well as copper from Chile and Peru.
Trump’s imposition of a 25% tariff on most goods from Mexico and Canada will impact the market. Analysts indicate that U.S. users rely on aluminum producers in Canada, such as Alcoa and Rio Tinto, for over half of their supply, leading them to seek alternative suppliers.
According to data from the U.S. Department of Commerce, the U.S. imported 5.46 million metric tons of aluminum products in 2023, which is crucial for the transportation, packaging, and construction industries. Canada accounted for 3.08 million tons, or approximately 56% of that total.
Glyn Lawcock, an analyst at the Sydney investment bank Barrenjoey, stated, “Canada will divert some aluminum from supplying the U.S. to other regions, so the U.S. may need to pay more to encourage aluminum from those other areas.”
This will be reflected in physical premiums, which include costs such as handling and transportation, needing to be paid in addition to the trading price for physical metal delivery.
ING analysts wrote in a report that the imposition of tariffs represents “significant upside risks to the U.S. Midwest aluminum premium.”
Rio Tinto declined to comment, while Alcoa’s William Oplinger noted in an earnings call last month that Alcoa could reroute its Canadian aluminum materials to Europe, while expecting more metal from the Middle East and potentially India to enter the U.S. market.
In terms of other metals, the redirection of trade flows may mitigate the impact of the tariffs. Citi analysts stated in a report that U.S. imports of copper and silver from Peru and Chile, as well as gold from Switzerland, are expected to increase. Together, Canada and Mexico account for nearly half of U.S. domestic silver consumption and about 10% of copper consumption, equivalent to around 147,000 metric tons of copper.
