Korean market raises concern over US Government’s anti-dumping investigation targeting aluminium extrusion products

The preliminary ruling by the U.S. government on an anti-dumping investigation concerning imported aluminium products has sparked concerns within the Korean industry. In response to this development, the Korean Ministry of Trade, Industry, and Energy (MOTIE) convened a countermeasures meeting with relevant Korean industries at the Korea Chamber of Commerce and Industry in Seoul on April 29. 

About the meeting

This meeting aimed to address the U.S. government's anti-dumping investigation specifically targeting aluminium extrusions. Initiated by the Aluminum Extruders Council, the U.S. Department of Commerce launched this investigation in October of the preceding year, encompassing aluminium extrusions from 15 countries, including Korea. Renowned for their high strength-to-weight ratio, aluminium extrusions have extensive applications in electric vehicle battery cases.

Currently, Korean aluminium extrusions imported into the United States benefit from duty-free status under the Korea-U.S. Free Trade Agreement (FTA). However, U.S. industry insiders contend that a 66.4 per cent tariff should be imposed on Korean aluminium extrusions, citing alleged below-market pricing practices.

Anticipated timelines involve the U.S. Department of Commerce issuing a preliminary ruling on the dumping investigation case on May 2, with a final ruling slated for September. Subsequently, in mid-November, the International Trade Commission (ITC) of the United States will assess potential damage to the U.S. industry. This determination will dictate the application of anti-dumping and countervailing duties on imported aluminium extrusions.

In 2023, aluminium extrusion capacity stood at around 49 million tonnes per annum globally. The global aluminium extrusions sector experienced a moderate recovery in 2023 following the pandemic-induced downturn in 2020. As per AL Circle's report, "The World of ALuminium Extrusions—Industry Forecast to 2030," in the coming years, extrusion demand is unlikely to witness the high past growth rates as the Chinese economy tapers off a bit. 

Scope of the investigation

The U.S. Department of Commerce is launching an investigation into aluminium extrusions imported into the United States from October 2022 to September 2023. According to an official from the Korea International Trade Association, the scope of this investigation is notably intricate and expansive compared to other cases. Numerous automotive components utilizing aluminium extrusions are anticipated to fall within the purview of items under scrutiny.

According to statistics from the U.S. Department of Commerce, in 2022, the United States imported approximately 57 million tonnes of aluminium extrusions valued at around US$3.19 billion from 15 different countries. Mexico emerged as the leading exporter, shipping 110,000 tonnes valued at US$660 million, while South Korea exported around 10,000 tonnes valued at US$77 million.

The potential imposition of significant anti-dumping duties on imported aluminium extrusions by the United States poses challenges, particularly for smaller Korean aluminium extrusion manufacturers. However, the impact could be even more significant for Korean automakers, potentially affecting their competitiveness in the U.S. market. Such duties could lead to business difficulties, while also potentially raising the prices of aluminium extrusions.

Moreover, the imposition of anti-dumping duties by the United States could escalate into trade conflicts, especially with China, as the investigation also targets products originating from China. Industry insiders in the U.S. assert that China has the highest margin, at 376.8 per cent, among the 15 countries exporting aluminium extrusions to the United States.