Weaker Chinese data; U.S. aluminium sector asks Britain & EU to unite against China


U.S. Representatives

Spokesman of the U.S. aluminum industry are speaking to EU counterparts. They have written to British Prime Minister Theresa May. Asking urgent action against “massive illegal subsidies” in China that bluster Western jobs.

Trade lawyers and some governments accuse China of unfairly subsidizing major industries in breach of the rules of the World Trade Organization (WTO). While China became part of the World Trade Organization in 2001.


Shifting focus to Aluminium


U.S. this year has reversed the focus to aluminum. Following European and U.S. action to protect their steel industries from China speaking about steel and copper of earlier times.

It has lodged a query with the WTO and launched an investigation into whether Chinese imports compromise national security.

“The WTO and U.S. and European leaders must act quickly to ensure a fair playing field.” Michael Bless, CEO CENX.O, told a news conference in London yesterday. China says it supports the work of the WTO.

  • The aluminum industry, represented by the China Trade Taskforce, has written to May urging her “to actively engage with the WTO on this matter and press for action”.

“A strong WTO that acts swiftly in situations such as this will be a vital part of securing Britain’s post-Brexit future” (Reuters)

The prime minister’s office had no immediate comment.

The industry leaders were also speaking to Brussels officials and to the Russian government. This floated the idea of an OPEC-style body for the aluminum industry.

They could not endorse that, but it was an

“acknowledgement of the severity of the issue”.


China’s Act


When China, the biggest aluminum consumer, joined the WTO it represented just over 10 percent of aluminum production worldwide. Now it is the world leader, accounting for more than 50 percent of global output and China’s Hongqiao has overtaken Russia’s Rusal as the biggest producer, while the U.S. and European sectors have gathered.

Industry body European Aluminium said the number of primary European aluminum smelters fell by nearly 40 percent between 2002 and 2015.

Trade lawyers say the ascendancy of China’s aluminum sector defies commercial logic as it faces higher bills for energy than the U.S. and Europe. It has the biggest input costs.

“China has no natural advantages other than illegal state support,” Alan Price of Washington law firm Wiley Rein said. (Reuters)


Main areas


Century Aluminum, which is majority-owned by Glencore, reported a first-quarter net loss. Part of the justification for the U.S. investigation into whether Chinese aluminum is a threat. It is that Century’s smelter in Kentucky is the only producer of high-purity aluminum required for U.S. combat aircraft.

In Europe, the main concern is how to maintain smelting capacity as part of a strong value chain, creating thousands of indirect jobs, rather than security, European Aluminium said in an email.

EU trade ministers, meeting in Brussels next week, are expected to discuss new rules on dealing with anti-dumping, which are likely to have most impact on Chinese imports.

In conclusion, the idea of OPEC-like association in the Aluminium market would impact prices in a really good way. That would make producers happy. But it will also have a great impact on Chinese economy. Mostly their imports, and also their production.


Trump Administration sets to checking the national security probe of aluminum imports

Once again, but this time for aluminium, U.S. launched an investigation to see if Aluminium imports from China and other countries damage national security. This step could lead to import restrictions on the metal.

Wilbur Ross, Commerce Secretary says investigation was similar to one announced last week for steel imports.

Firstly, unfairly traded imports were putting on the U.S. aluminum industry, causing several domestic smelters to close production in next few years. Ross told reporters the probe was lead by the extreme competitive pressures. Is this the real national security issue or just something called competitive prices? On which the world economy is based.


China’s position

China is seriously concerned by the probe and hopes to resolve the dispute through negotiations. As the world’s largest producer and exporter. Of almost all the base metals. Its economy mainly depends on this.

Secondly, The U.S. move is the latest of several potential U.S. actions. Aimed at stemming a rising tide of aluminum imports. The Commerce Department is investigating inducement that Chinese companies are dumping aluminum foil into the U.S. market below cost and benefiting from unfair subsidies.

Thirdly, Ross said part of the justification for the investigation was that U.S. combat aircraft. Such as the Lockheed Martin F-35 joint strike fighter and the Boeing F/A-18 Super Hornet require high-purity aluminum that is now produced by only one smelter, Century Aluminum Co. (Reuters)

Following, He said that company could probably meet U.S. peacetime needs. But not if the United States needed to ramp up defense production for a conflict. The same high-purity aluminum goes into armor plating for military vehicles. And the production of naval vessels.

“At the very same time that our military is needing more and more of the very high-quality aluminum. We’re producing less and less of everything. And only have the one producer of aerospace- quality aluminum.” Ross told a White House briefing.


The investigation aims


The investigation will determine if there is enough U.S. aluminum capacity to meet U.S. defense needs. And will also assess the effects of lost jobs, skills and investments on national security.

Although Ross said China was a major contributor to the global excess capacity in aluminum production, he said imports from other countries were also causing problems. The U.S. industry faces these problems because the other countries have lower production costs.

“This is not a China-phobic program, this has to do with a global problem,” Ross said.

Last November, a dozen U.S. senators requested that a U.S. national security review panel reject the $2.3 billion acquisition of Cleveland-based aluminum products maker Aleris Corp by China’s Zhongwang International Group Ltd. (Reuters)

Aleris spokesman Jason Saragian says the aluminum probe announced by the Commerce Department was unrelated to the ongoing review of the merger by the Committee on Foreign Investment in the United States (CFIUS).

“The broad inquiry will not affect the pending acquisition, because the transaction does not involve any imports from China.” (Saragian )