The Truth Behind
the Midwest Premium
The Midwest Premium (MWP) is a textbook example of a market that lacks competition, transparency and oversight.
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For a commodities market to function properly, three components are absolutely necessary:
Competition
Without sufficient competition, a market will devolve into a monopoly.
Transparency
Without adequate transparency, consumers have no way of knowing if the price they pay is fair or if it has been arbitrarily manipulated.
Oversight
Without appropriate oversight, markets can be unduly influenced by monopolistic behavior.
Though defenders of the status quo like to claim the Midwest Premium (MWP) is merely an independent assessment of the price of aluminum, the reality is that the MWP is a black box that raises prices for consumers while leaving them in the dark.
FAQ
A.
U.S. businesses that use cansheet aluminum, such as the beverage industry, purchase aluminum by paying a Midwest Transaction Price (MWTP). The MWTP consists of the base price for aluminum metal AND an additional premium on top of the base price. This additional cost is known as the Midwest Premium (MWP).
A.
The MWP is calculated through a “complex,” non-transparent benchmarking method effectively controlled by a single company.
A.
Originally imposed in 2018, the U.S. government created tariffs on aluminum imported from other countries. To learn more about the tariffs, visit CBP.gov/trade.
A.
On June 3, 2025, the President issued a proclamation doubling Section 232 tariffs on steel and aluminum imports to 50 percent for all countries except the United Kingdom, which remains at 25 percent. The increase took effect the following day, June 4, 2025.
A.
Because the MWP is calculated in a non-transparent, non-competitive manner, and therefore purchasers of cansheet aluminum are being forced to pay a tariff-burdened price on all aluminum, regardless of whether it is actually subject to Section 232 tariffs.
What can be done to fix this?
Eliminating the additional fees on imported aluminum would provide immediate relief to purchasers of aluminum.
Increased Midwest Premium Oversight Helps Consumers
Because of the Midwest Premium, companies in the aluminum supply chain charge the full tariffed price on all aluminum, regardless of whether it is subject to tariffs or not, hurting end-users and ultimately consumers.