Understanding the Market | Aluminum stocks rise in early trading as U.S. steel and aluminum tariffs double, increasing volatility in the metal market; institutions say there are still opportunities in long-term rigid supply varieties
Aluminum stocks rose in early trading, with CHINAHONGQIAO up 2.96%, NANSHAN ALUMINIUM INTERNATIONAL up 1.87%, and CHALCO up 1.28%. U.S. President Trump announced an increase in aluminum and steel import tariffs to 50%, leading to a rise in U.S. aluminum and steel futures prices and increased volatility in the metals market. Goldman Sachs analysts expect that the price increase may impact steel demand in U.S. manufacturing. Zhongtai Securities believes that the downside space for base metal prices is limited and recommends focusing on investment opportunities in rigid supply varieties such as aluminum and copper
According to Zhitong Finance APP, aluminum stocks rose in early trading. As of the time of writing, China Hongqiao (01378) was up 2.96%, trading at HKD 14.6; Nanshan Aluminum International (02610) was up 1.87%, trading at HKD 27.25; and China Aluminum (02600) was up 1.28%, trading at HKD 4.76.
In terms of news, recently, U.S. President Donald Trump announced an increase in the import tariffs on aluminum and steel to 50%, leading to a rapid rise in U.S. aluminum and steel futures prices. Starting this Wednesday, the aluminum import tariff will be raised to 50%. Trump aims to protect domestic producers' profits and stimulate investment in new capacity by raising tariffs. Following his announcement, the stock prices of U.S. steel and aluminum producers soared in after-hours trading. However, construction companies warned that the increase in tariffs would raise the costs of key construction materials.
According to market media reports, due to Trump's constantly changing tariff measures, volatility in the metal market has intensified. On June 2, the contract price of aluminum on the New York Mercantile Exchange rose by 54%, reaching its highest level since 2013. Goldman Sachs analysts believe that the price increase may further impact the demand for steel in U.S. manufacturing, with expectations of a contraction in steel demand in U.S. manufacturing this year. Zhongtai Securities previously pointed out that against the backdrop of a long-term reshaping of supply and demand patterns, the downside potential for base metal prices may be limited, and it is essential to look for the next entry opportunity, especially for rigid supply varieties like aluminum and copper
