Kaiser Aluminum Corporation

The United States is expected to lower tariffs on Canadian steel and aluminum from 50% to 25% as part of a tentative trade framework between the two countries, according to reports from Bloomberg and others. Terms could still change before any official announcement, with different rates possibly applying to some derivative products, and details remain under discussion. Steel imports from Canada could face a quota system with higher tariffs on volumes exceeding the quota, while aluminum likely would not face a quota under current considerations. President Trump said the deal would also remove Canadian tariffs on US agricultural goods. Shares of Canadian steel producer Algoma Steel closed 17% higher, while US steel and aluminum producers including Nucor, Cleveland-Cliffs, Steel Dynamics, Reliance, Commercial Metals, Century Aluminum, and Kaiser Aluminum fell between 2.6% and 7.5%; Alcoa, which produces more than 1 million metric tons of aluminum per year in Canada, closed up 3%.

Wells Fargo downgraded Kaiser Aluminum to Underweight from Equal Weight, trimming its price target to $158 from $160, citing a stretched valuation that has not fully reflected the decline in aluminum prices. Analyst Timna Tanners noted that Kaiser is a smaller beneficiary of favorable aluminum scrap spreads due to its lower scrap utilization relative to peers. While higher second-quarter LME aluminum prices may temporarily boost reported EBITDA through lagged non-cash metal benefits, that tailwind is expected to fade in the second half of the year on softer LME prices. Tanners also upgraded Ternium to Equal Weight from Underweight with a $45 price target, up from $43, pointing to improving conditions in Mexico, lagged price hikes from U.S. increases, and new capacity that should begin contributing in the second half of 2026 and into fiscal 2027. She added that steel prices may be near a peak but the recent sharp selloff in equities could be overdone, and Nucor remains her top pick in the group.