(Repeats story sent on Friday with no change to text)
* Aluminium smelting is labour light
* Physical market premiums highest since Sept. 2016
* Flashback to washing machines and solar panels
By Pratima Desai
LONDON, March 2 (Reuters) - U.S. plans to slap taxes onaluminium imports will make life more expensive for itsmanufacturers which use the metal to make high value productslike cars, because the U.S. doesn't have the capacity to producewhat it needs.
Meanwhile, major exporters to the U.S. are likely to remainunscathed as the intention is to impose a blanket duty, leavinga level playing field for all.
President Donald Trump announced plans on Thursday to imposea 10 percent tariff on aluminium imports. He will make a finaldecision by April 11. January and October last year, the U.S. importedmore than 5.7 million tonnes of aluminium, a rise of 18 percentover the same period in 2016, according to the U.S. CommerceDepartment.
The U.S. produced just 840,000 tonnes of aluminium in 2016,a metal widely used in transport and packaging, according to theU.S. Geological Survey.
Kamil Wlazly, a senior metals analyst at consultants WoodMackenzie said aluminium product makers and the consumers ofthose goods such as car makers were a key part of the U.S.economy, unlike producers of the metal itself.
"Consumers will have to pay more, the duty will erode theircompetitiveness," Wlazly said. "Producers ability to increaseoutput is limited to restarting closed capacity - about 600,000tonnes. They can't really build new capacity because they don'thave cheap power."
Depending on the country, typically between 30-40 percent ofaluminium smelting costs are for electricity. Outside China,capacity is mainly in areas where energy is cheap and easy toaccess.
Aluminium consumers include product makers such as Novelis,Constellium CSTM.N and Arconic ARNC.K , while end users wouldinclude auto makers such as Ford F.N , which produces the F150 pick up truck with a body made entirely out of aluminium.
"The aluminium consumer lobby has gone into overdrive, theyneed to stop this. Aluminium smelting is labour light, there aremany, many more jobs producing higher value goods," a consumersource said.
Producer sources are waiting to see whether Trump goes aheadwith the import tax, but say a blanket levy means a levelplaying field for all exporters and that the U.S. will need toimport aluminium whatever Trump does.
"If suppliers are not compensated for the tax you could seedisruption in the U.S. market...The U.S. needs to importaluminium," said CRU Group analyst Eoin Dinsmore.
"They may be vague, but some annual supply contracts willhave had Section 232 renegotiation clauses written in...It isjust going to cost (U.S. consumers) more."
U.S. aluminium consumers have been worrying about thepossibility of import taxes for over a year now.
It is why premiums -- the extra cost above the London MetalExchange benchmark price around $2,150 a tonne -- to buy metalon the physical market in the U.S. have climbed to around $350 atonne, more than double the level of $132 a tonne in Sept. 2016,weeks before Trump was elected President.
"Trump has got it wrong if he thinks only China will beaffected," a producer source said.
Chinese imports of nearly 550,000 tonnes between January andOctober last year, according to U.S. Commerce Department datawere only the fourth largest.
UBS analysts said in a note: "Flashing back to recent tradeaction on washing machines and solar panels, the administrationset the precedent of not providing country-specific carve outs."
The United Arab Emirates was the third largest importer tothe U.S., with nearly 570,000 tonnes between January and Octoberlast year and Russia second with more than 625,000 tonnes.
Canada was the biggest supplier of aluminium to the U.S.with about 2.48 million tonnes, which could threaten to derailTrump's plan.
Canadian aluminium is vital for the U.S. defense industryand the Commerce Department has previously said "the U.S. andCanadian defense industrial bases are integrated," arelationship that "has existed since 1956 and is codified in anumber of bilateral defense agreements."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^U.S. Imports of Primary Aluminium:
http://tmsnrt.rs/2p55b28U.S. Imports of Semis:
http://tmsnrt.rs/2p8lD2xCME aluminium premium futures' reaction to release of theSection 232 report:
http://tmsnrt.rs/2BH0k1i
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>