The Material Report #015

This fortnight in 30 seconds

Aluminum's premium fell before the deal report

Wednesday's headline was a tentative US-Canada deal that would cut the tariff on Canadian steel and aluminum from 50% to 25%. That is Bloomberg's reporting from unnamed officials, the terms could still shift, and nothing is signed. If your instinct is to wait for cheaper aluminum, first look at what moved before the report.

Primary aluminum in the US is commonly priced from the exchange price plus the Midwest premium. The premium carries tariff exposure along with regional supply and delivery conditions. A distributor's 6061 list price also includes conversion, form, and commercial layers. That distinction matters because those layers did not move together.

On Thursday, the September Midwest premium contract fell 8.2% to $0.95/lb, while the October and November contracts fell more than 12%, according to Platts data reported by Bloomberg. The exchange price moved far less. Public premium assessments had already fallen from $1.1905/lb in May to $1.087/lb by July 3. The tariff-sensitive part of the stack was deflating before the deal leaked.

The distributor list prices we track confirm an earlier move, but not a uniform one. Most 6061 bar and extrusion families reset on August 5, two weeks before the August 19 report. Sheet rose instead. That makes "aluminum is down" too broad to use on a purchase order.

The next step is still two-sided. If the tariff cut is implemented, Morgan Stanley estimates another $0.10 – $0.12/lb of Midwest premium downside. If talks collapse, the cut likely dies with them and new 50% duties hit roughly $20 billion of other Canadian goods at 12:01 a.m. ET Saturday. As of Thursday evening, nothing is signed. By the time you read this, the deal could be done, dead, or extended.

Last issue's call to cover only a month or two of 6061 held for bars and extrusions, but not for sheet. This week, cover firm needs, refuse a long lock priced from the old premium, and re-quote after the deadline. Ask how many cents of premium change are in the new number.

From our benchmark

The list move started before Wednesday's report, but it did not reach every form. From the complete week of July 27 to the complete week of August 10, the aluminum distributor list-price median fell 5.2% across 601 matched canonical product groups. COMEX aluminum rose 3.1% over the same endpoints, based on three daily closes in the first week and four in the second.

The 6061 median fell from $4.84 to $4.59/lb across 425 matched canonical product groups. Angles, flat bars, and round bars each fell about 5.2%, across 47, 148, and 67 matched groups. Sheet went the other way: up 6.0% across 12 groups. All 24 matched stable sheet tuples rose, so the split is product-specific, not a sample-mix artifact. The preliminary week of August 17 through August 20 leaves the overall 6061 median unchanged at $4.59/lb across 430 matched groups.

Brass was more uniform. C360 round, hex, and square bar rose 7.1~7.2% across 48 matched canonical product groups in synchronized August 6 and August 11 steps. COMEX copper rose 3.4% over the complete-week endpoints, based on four and five daily closes. Treat the C360 move as a list-price reset, not a temporary copper spike.

Pricing notes

Steel: Nucor's posted hot-rolled price moved from $1,145/st in the July 27 week to $1,160/st in the August 10 week. Its August 17 letter, preliminary context for this report, added $10/st to $1,170/st for a fifth straight weekly increase. The broad steel distributor list-price median was unchanged across 1,963 matched canonical product groups over the completed-week comparison. The posted-price push has not become a broad list move. Quote against a live market reference, not just the latest letter.

Stainless: the August 304 surcharge fell $0.0749/lb from July, and the 316 surcharge fell $0.0779/lb. The 304 sheet-and-plate list median passed through about $0.07/lb across 38 matched canonical product groups within the first complete August week. The 316 sheet-and-plate result was not a decrease: its matched median rose $0.02/lb across 33 groups by the August 10 week. That is a split result, not evidence of uniform surcharge pass-through. Ask the quote to identify its surcharge month, then compare again after September posts. Do not buy ahead on an unposted forecast alone.

Copper / brass: copper set two COMEX records in the window, just over $6.70/lb on August 5 and $6.714/lb on the September contract a week later. The London squeeze eased after 20,000 metric tons reached LME warehouses, but C360 list pricing had already reset in two synchronized steps. Bronze produced only one matched canonical product group in the completed-week comparison. That is too thin for a direction call.

Diesel and freight: EIA's August 17 survey put US on-highway diesel at $5.454/gal, up $0.197 from the prior week and the highest since late May. Check that your carrier's fuel surcharge follows a published schedule and base price.

What I'm watching next

• Saturday, 12:01 a.m. ET: the tariff deadline. A signed cut points the Midwest premium lower. A collapse removes that relief case. Re-quote 6061 on Monday either way.

• Late August: September stainless surcharges. Compare the new posts with August before changing coverage; the benchmark does not support one call across 304 and 316.

• Monday, August 24: Nucor's next letter. A sixth increase against a flat broad list-price median would stretch the posted-versus-list gap again.

• September 1: ISM's next input-cost read. #014 flagged a fourth straight slowdown as the test that cost pressure is easing. That test is still live.

If the tariff news shows up in a quote next week, in either direction, email me. One line with the alloy, form, and direction is enough.

Wondering whether a material quote is high? Run it through Quote Check, paste the quote, and see where it lands against published distributor pricing for that alloy and size. Free, takes about a minute.

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