Constellium Shares Are Falling Behind Competitors As Europe Copes With Aluminum Supply Restraints - Alcoa (NYSE:AA), Century Aluminum (NASDAQ:CENX)

In October 2023, Constellium faced challenges due to geopolitical factors affecting its aluminum supply, particularly restrictions on Russian imports. The U.S. introduced a 200% tariff on aluminum products sourced from Russia, exerting upward pressure on costs for companies reliant on these imports. Historically, Russian aluminum, especially from Rusal, was favored in Europe for its hydroelectric production methods. However, the ongoing conflict in Ukraine forced European countries and the U.S. to reconsider their reliance on Russian aluminum, creating a pivotal shift in supplier dynamics. Constellium's reliance on imports meant it had to adapt its focus towards European and U.S. production, but this transition isn't immediate and may take time given existing supply chains. With tariffs escalating from the previous rate of 25% to 200%, international pressures have caused significant price increases. Although Constellium's long-term prospects appear optimistic, the immediate future is uncertain, as investors await the outcome of regulatory discussions in Europe regarding Russian imports. The European Commission is deliberating on imposing tariffs similar to those enacted by the U.S., which could further influence Constellium’s operations and share performance. Constellium's trading price hovers near $15, reflecting investor caution amidst the evolving situation.