Blog · Pricing
Midwest aluminum premium and regional premiums: what they are, where they stand and what they add to your price
The premium is what buyers pay on top of the LME to have physical aluminum in a region. In the United States the benchmark is the Midwest premium, in US cents per pound: on October 9, 2026 it stood at 105 cents, about $2,315 per metric ton (SMM), with LME cash at $3,055.50 (Westmetall), so it made up 43% of the cost of metal. It rose with the 50% Section 232 tariff in force since June 2025: in May 2024 it was 19.50 to 22 cents (Fastmarkets). For Mexico, Fastmarkets has published a cif premium to Mexican ports since March 2025: $310 to $360 per metric ton on March 10, 2026. To convert cents per pound to dollars per metric ton, multiply by 22.046. Sources: SMM, Westmetall, Fastmarkets, CME Group, USGS and NIST, October 2026.
The price of a ton of aluminum sheet or coil has three parts: the LME, the premium and the conversion cost (FAB). The guide on how aluminum price is calculated covers all three. This one is about the premium, which stopped being a detail in 2025 and 2026: on October 9, 2026, the US Midwest premium was worth three quarters of the LME price.
What is the aluminum premium?
The premium is what buyers pay on top of the LME to have physical aluminum in a given region; it is also called the regional premium or LME premium. It is not a separate price but a differential over the London Metal Exchange quote, and it reflects each region's physical market: trade policy, the cost of moving metal and how much is available (CME Group, May 9, 2025). The main benchmarks:
- United States: the Midwest premium, for P1020A ingot (99.7% aluminum, lots of 100 metric tons or more) delivered to consumer works in the Midwest, duty paid, in US cents per pound (c/lb). Fastmarkets has published it since 2003, now daily, and Platts, part of S&P Global, publishes its own. CME Group lists futures on the Platts assessment: 55,116 pounds per contract, about 25 metric tons, settled on the monthly average.
- Europe: Rotterdam, duty paid and duty unpaid.
- Japan: the MJP, for shipments to Japanese ports.
- Mexico: P1020A cif Mexico, from Fastmarkets, since March 2025.
These premiums are for ingot; in the US, extrusion billet is priced as an upcharge over LME plus the Midwest premium (Fastmarkets, 2026). Coil and sheet have no premium of their own: their price is LME plus the metal premium plus FAB. Almexa does not buy rolling slab: it casts its own from primary ingot and recycled aluminum.
From cents per pound to dollars per metric ton
The Midwest premium is quoted in US cents per pound and the LME in dollars per metric ton. One pound is 0.45359237 kg (NIST), so a metric ton holds 2,204.62 pounds and one cent per pound equals $22.046 per metric ton. To convert, multiply: 105 c/lb × 22.046 = $2,314.85/t.
Each cent per pound of premium adds $22.05 per metric ton: $441 on a 20-ton order.
What is the Midwest premium today?
In October 2026 the Midwest premium hovered around one dollar per pound; each agency assesses with its own method and timing, so they differ by a cent or two:
| Benchmark | Level | Source and date |
|---|---|---|
| Midwest premium, duty paid | 105 c/lb, $2,315/t | SMM, Oct 9, 2026 |
| Midwest premium | $2,312/t, 104.9 c/lb | Reuters, cited by Crux Investor, Oct 14, 2026 |
| CME October 2026 future | 107.5 c/lb, $2,371/t | CME Group, settlement of Oct 23, 2026 |
In other regions the premium is much lower:
| Region and basis | Premium | Source and date |
|---|---|---|
| Europe, Rotterdam duty paid | $550 to $585/t | Fastmarkets, Oct 13, 2026 |
| Japan, MJP spot cif | $230/t | SMM, Oct 9, 2026 |
| Mexico, cif Veracruz, Altamira or Manzanillo | $310 to $360/t | Fastmarkets, Mar 10, 2026, latest public figure |
Why did the Midwest premium go up?
The United States produced about 660,000 metric tons of primary aluminum in 2025 and relied on imports for 60% of apparent consumption; Canada supplied 56% of imports from 2021 to 2024 (USGS, February 2026). That metal pays the Section 232 tariff: 25% from March 2025 and 50% from June 4, 2025 (Proclamation 10947). Since April 6, 2026, the 50% applies to the full customs value, including goods from Canada and Mexico that qualify under USMCA (Proclamation 11021).
Because the Midwest premium is for duty-paid delivered metal, the tariff is built in: 50% of a $3,055 LME is $1,528 per metric ton, about 69 c/lb. Reuters attributed the October premium to the tariff as much as to metal shortage (cited by Crux Investor).
| Date | Midwest premium | Source |
|---|---|---|
| May 3, 2024 | 19.50 to 22.00 c/lb | Fastmarkets; the earlier record was 40 c/lb in April 2022 |
| Early June 2025 | Just under 60 c/lb | CRU, with the 25% tariff |
| Jan 6, 2026 | Close to 93 c/lb | CRU, after seven months of gains |
| Jul 7, 2026 | 110 to 112 c/lb | Fastmarkets |
| Oct 9, 2026 | 105 c/lb | SMM |
What moves it up or down:
- Tariffs and expectations about them. On August 21, 2026, reports of a cut to 25% for some Canadian metal sent the September future down 8.2%, to 95 c/lb (Aegis Hedging). As of October 22 the tariff was still 50% (Section 232 guide).
- Supply. In 2026 the closure of the Strait of Hormuz cut aluminum flows from the Middle East and pushed premiums up in several markets, Mexico included (Fastmarkets, March 12, 2026).
- Inventories. LME stocks fell from an average of 498,670 metric tons in January 2026 to 235,800 on October 23 (Westmetall).
- Demand and freight within North America (CME Group).
The premium does not follow the LME: from September 30 to October 15, 2026, LME cash fell from $3,204 to $2,999 while the Midwest premium stayed above one dollar per pound.
Is there an aluminum premium for Mexico?
Mexico does not produce primary aluminum; it imports it (decree of May 8, 2024, reported by El Financiero). Since March 11, 2025, Fastmarkets has published every two weeks the P1020A premium, cif Mexico: 99.7% ingot, minimum 100 metric tons, delivered to Veracruz, Altamira or Manzanillo, in dollars per metric ton over the LME.
| Date | P1020A premium, cif Mexico |
|---|---|
| Apr 8, 2025 | $390 to $410/t |
| Sep 9, 2025 | $300 to $340/t |
| Feb 24, 2026 | $300 to $350/t |
| Mar 10, 2026 | $310 to $360/t |
Source: Fastmarkets, articles from 2025 and 2026. Later values are for subscribers; we could not verify the October 2026 level.
That premium depends on origin and freight to the port: 24.7% of the unwrought aluminum Mexico imported from January 2024 to February 2026 came from Gulf countries (Fastmarkets). It also depends on Mexico's duty by origin: in May 2024 the government removed the duties of up to 35% it had placed on primary metal from countries without a trade agreement (El Financiero). And on where sellers prefer to ship: in April 2026, sellers quoted by Fastmarkets favored Asia and Europe, which paid more. Cif ends at the port; inland freight, financing and the trader's margin come on top. Almexa buys primary ingot already imported into Mexico from local traders (aluminum origin).
The Midwest premium is metal delivered in the US with Section 232 paid; the cif Mexico premium is metal at a Mexican port, without that tariff or freight to the plant. What matters in a quote is that it names the premium and its date, and that two offers are compared on the same one.
How much the premium weighs in a ton of sheet or coil
With data from October 9, 2026, for metal delivered in the Midwest:
| Item | US dollars per metric ton |
|---|---|
| LME cash (Westmetall) | 3,055.50 |
| Midwest premium, 105 c/lb (SMM) | 2,314.85 |
| Metal with premium | 5,370.35 |
| FAB from your quote | Depends on product, alloy, gauge and volume |
| Sheet or coil price | 5,370.35 + FAB |
That day the Midwest premium was 43% of the cost of metal in the United States. With a $335 premium, the midpoint of the latest public cif Mexico figure, the metal would total $3,390.50 and the premium would be 10%. Try your own numbers in the aluminum price simulator, which takes the premium in dollars per metric ton.
What it means for buyers
Two quotes with the same LME differ when they use different premiums (Midwest, cif Mexico or the supplier's own) or a different date, when the delivery point, payment terms or currency change, or because of each product's FAB. To read an "LME + premium + FAB" quote, ask in writing which LME it uses (cash, three-month or prior-month average) and its date; which premium, from which agency, its date and unit; the FAB per product; and the delivery point.
Fixing metal and premium on the order date gives a firm price; a monthly average spreads the ups and downs; companies with a hedging policy use the CME premium futures. What fits depends on your risk policy: this is not investment or pricing advice.
If you buy Mexican sheet or coil for delivery in the US, it pays the 50% Section 232 duty on its full customs value at entry; compare delivered, duty-paid prices, as the Section 232 guide and the USMCA guide for coil and sheet from Mexico explain. If you compare a mill against imports from Asia, an FOB price leaves out freight, duties, deposit and transit time, as covered in import from Asia or buy from Mexico.
Almexa coil and sheet
Almexa quotes per metric ton as LME plus premium plus FAB, with the day's LME, from Cuautitlán Izcalli, State of Mexico: aluminum coil from 0.45 to 3.76 mm and up to 1,219 mm wide, and aluminum sheet from 0.5 to 3.76 mm. Send your specification for a quote from the mill and ask for the breakdown with the premium benchmark and date.
Sources
All accessed October 26, 2026.
- SMM, October 9, 2026: Midwest and MJP premiums.
- Westmetall, LME Aluminium: daily table and monthly averages: LME cash and stocks.
- CME Group, Platts Midwest premium future: specifications, settlements of October 23, 2026 and article on regional premiums, May 9, 2025.
- Fastmarkets, Midwest premium: methodology, July 2026, presentation of April 10, 2026 and articles of July 8, 2026, May 7, 2024 and October 28, 2022; Rotterdam, October 14, 2026.
- Fastmarkets, cif Mexico premium: launch, specification and articles of April 10, 2025, September 17, 2025, March 12, 2026 and April 17, 2026.
- CRU, January 6, 2026; Aegis Hedging, August 21, 2026; Crux Investor, October 14, 2026.
- USGS, Mineral Commodity Summaries 2026, Aluminum: US production and imports.
- Federal Register: Proclamation 10947 and Proclamation 11021.
- El Financiero, May 9, 2024: primary aluminum and duties in Mexico.
- NIST, Guide to the SI, Appendix B.9: pound to kilogram.
Frequently asked questions
What is the Midwest aluminum premium?
It is what buyers pay on top of the LME for P1020A aluminum ingot delivered to consumer works in the US Midwest, duty paid. It is quoted in US cents per pound; Fastmarkets and Platts assess it daily and CME Group lists futures on the Platts assessment. Since 2025 it carries the 50% Section 232 tariff.
What is the Midwest premium today?
In October 2026 it hovered around one dollar per pound: 105 c/lb, about $2,315 per metric ton, on October 9 according to SMM, and 107.5 c/lb for the CME October future at the October 23 settlement. Agencies differ by a cent or two depending on method and timing.
What does LME premium mean?
It is the regional premium: the differential added to the London Metal Exchange aluminum price to have physical metal in a region, covering freight, duties and financing. Each region has its own: Midwest in the United States, Rotterdam in Europe, MJP in Japan and cif Mexico.
How do I convert the aluminum premium from cents per pound to dollars per ton?
Multiply by 22.046, because a metric ton holds 2,204.62 pounds: 105 c/lb is $2,314.85 per metric ton. To go back, divide by 22.046.
Why did the Midwest premium go up?
Because the United States imports 60% of the aluminum it consumes (USGS, 2026) and that metal pays the Section 232 tariff: 25% from March 2025 and 50% from June 4, 2025. The premium went from 19.50 to 22.00 c/lb in May 2024 to 110 to 112 c/lb in July 2026 (Fastmarkets).
Is there an aluminum premium for Mexico?
Yes. Since March 11, 2025, Fastmarkets has published every two weeks the P1020A premium, cif Mexico, for ingot delivered to Veracruz, Altamira or Manzanillo. The latest public value we found is $310 to $360 per metric ton, from March 10, 2026; it carries no US tariff and no freight to the plant.
How much is a ton of aluminum?
On October 9, 2026, LME cash closed at $3,055.50 per metric ton (Westmetall). Delivered in the US Midwest, with the 105 c/lb premium, the metal cost about $5,370 per metric ton. Sheet and coil add each product's FAB, quoted against your specification.
Leads Almexa Aluminio, Mexico's aluminum rolling mill. Writes about alloys, process, pricing and supply for industrial buyers in North America. LinkedIn