US aluminum producers ask for action on China

US aluminum producers ask for action on China

Metals producers say imports from China are flooding into the U.S.


A trade union and a United States-based aluminum producer are asking the federal government to investigate the level of government subsidization of aluminum production in China. The group making the request says Chinese finished and semifinished aluminum has been pouring into the U.S. for more than a year.

A March 9, 2016, article in the Wall Street Journal says the United Steelworkers union (USW) and Chicago-based Century Aluminum Company also “sent a team of researchers to China last year to investigate evidence of government subsidies for aluminum makers” there.

The USW and Century Aluminum say they “expect to provide evidence showing the Chinese government has been providing billions of dollars in subsidies to some aluminum companies, including access to low-interest loans,” according to the Journal article.

The Arlington, Virginia-based Aluminum Association has been issuing press releases and comments for more than a year making similar allegations. “As China’s economy has begun to slow, and less of [its] metal is being absorbed domestically, there is a severe oversupply of Chinese-produced metal. This oversupply is driving a dramatic increase of imported Chinese aluminum into the United States,” the group says on its website.

According to Aluminum Association’s own data, U.S. imports of semifabricated aluminum products from China grew 181 percent from 2012 through 2015.

The Journal article pegs the value of total aluminum exports from China (to all destinations) as having risen from $6.2 billion in 2006 to $23.8 billion in 2015.

Any findings confirmed by the U.S. government likely would end up being forwarded to the World Trade Organization (WTO) to seek approval to impose remedies. A Chinese embassy spokesperson quoted by the Journal comments that WTO member nations, including China, “should strictly abide by the WTO rules and use trade remedy measures in a prudent, restrained and rules-compliant way.”

Despite a booming automotive industry in the U.S. and a stable construction sector, primary aluminum production in the U.S. declined 7.2 percent in 2015 compared with the year before, falling from 1.71 million metric tons in 2015 to 1.59 million metric tons in 2015. Secondary alloys production declined 2.4 percent, according to figures maintained by the United States Geological Survey (USGS), totaling 953,000 metric tons in 2014 but just 930,000 metric tons in 2015.

The Wall Street Journal, also citing USGS statistics, says aluminum “production in China has surged, gaining 31 percent in 2015 [and rising] to 32 million tons.”

USGS statistics for 2015 indicate that China shipped 395,000 metric tons of aluminum to the U.S. in 2015, up percent 36.7 from the 289,000 metric tons it shipped in 2014.

However, North American Free Trade Agreement (NAFTA) partner Canada was a far larger factor in U.S. aluminum import markets in 2015. Taking advantage of the weak Canadian dollar, operators of smelters in Canada sent more than 2.8 million metric tons of aluminum into the U.S. in 2015—more than seven times the volume that came in from China.