Aluminum Association request DOC not to allow broad exclusion on Chinese aluminium products

Aluminum Association President & CEO Heidi Brock has sent a letter to the Commerce Department Secretary Wilbur Ross responding to the request to “exclude rolled aluminium can sheet and primary aluminum and ingot for food and beverage containers, lids, and closures from the scope of any actions that you might recommend to the President in connection with the Section 232 national security investigation on imports of aluminum.” 

The Aluminum Association has expressed their disagreement to such broad exclusion request and put up the following points in support of their opinion:

1. 1. Broad exclusions may become means of entry for all Chinese products, as products can be misclassified when entering the U.S. market and it may indulge more fraudulent practices.

1. 2. Exclusion of can sheet products may result in China transferring its production from other rolled products to can sheet products. Chinese capacity of aluminum rolled products is estimated to grow at an annual rate of 9.3% between 2012 and 2020 and China’s consumption is expected to grow at a rate of 6.8%. This will lead to an overcapacity of about 7.0 million tons by 2020. In comparison, the entire North American rolled product market was 4.2MMT in 2016. This excess capacity are expected to being exported to other Asian countries and to the U.S., where imports of aluminum sheet have more than tripled and captured almost 10% of the total demand.

1. 3. Domestic industry growth depends on both high value-added products (such as defence products) and higher volume products (such as can and automotive sheet). Large installed capacity at the plants requires substantial volumes to cover fixed cost. Excluding can sheet would impact competitiveness of the higher volume products and affect the capacity to invest in the domestic plants and especially towards national defence, which represent around 5% of the industry revenue.

{googleAdsense}

So, the association has urged the Administration to take actions to promote a fair, equitable, and rules-based global market which is also equally competitive. The association has requested the Commerce Department to recommend actions to the President under Section 232 to address China’s massive and growing overcapacity, without allowing for broad exclusions (with the exception of aluminum powder)and while protecting existing trading relationships with Canada and Europe.