European Aluminium protests planned EC suspension of duties on Chinese imports

European Aluminium, an industry association, is set to challenge a proposed suspension by the European Commission of definitive anti-dumping duties on aluminum flat-rolled products originating in China.

The industry "is very determined to pursue all avenues to challenge the proposed suspension because it is fundamentally unwarranted and contradictory to the Commission's trade and climate ambitions. It could also create a spill-over risk for other industrial sectors," European Aluminium said Sept. 10.

Earlier in September the EC indicated an intention to suspend for nine months a definitive imposition of anti-dumping duties on aluminum flat-rolled products originating in China.

The EC's main arguments for the proposed suspension were understood to be an imbalance in supply and demand, the recent price increase in aluminum and an alleged shortage of material.

According to the terms of the EC's AD case 668 against Chinese flat-rolled aluminum products, provisional measures were to be imposed on the imports as from April 12 and definitive duties of 14%-25% were due to be levied from October 12.

The commission found a country-wide dumping margin of 88% and specific exporters were found to dump at 24%-72%, according to information supplied by European Aluminium.

EC spokespersons did not immediately reply to requests for further clarification.

However, a document issued by the EC in April noted that import volumes of aluminum flat-rolled products originating in China had decreased by 26% in the four months following initiation of the trade case in August 2020, compared with the investigation period.

Flat-rolled aluminum is used in the transport, construction,consumer goods and packaging industries.

Surging prices

European and global market demand for metals and steel products has recovered rapidly on the back of government stimulus following 2020's COVID-19-related slump, leading to strong price recovery and supply tightness in some products.

LME primary aluminum cash prices this week shot to a 13-year high, to be at $2,909/mt on Sept. 10.

The recent price gain is largely attributed to primary aluminum production cuts in China -- which accounts for more than half global production -- linked to power shortages and pollution control measures. Primary aluminum production in China is largely coal-powered.

A military coup in Guinea Sept. 5 also bolstered prices amid concerns over potential disruptions to the country's bauxite exports.

Imports of Chinese flat rolled aluminum products into the EU rose from 100,000 mt in 2017 to more than 200,000 mt in 2019, taking a market share of 9% in a three-year period, according to European Aluminium data.

European Aluminium "strongly disagrees" with the EC's stance on the AD duties suspension, an association spokesperson said Sept. 10.

"There is no risk of shortages. As acknowledged by the European Commission, there is enough EU capacity for all products under the anti-dumping investigation's product scope to meet current and future EU demand," the spokesperson said.

"EU production capacity did not downsize during the COVID crisis. The Commission's findings confirm a capacity increase of 25% post the investigation period. The current available capacity of EU producers is at 20% and can largely supply the increased demand."

News of the proposed suspension of duties "has sent shock-waves through the aluminum industry and other industrial sectors," Gerd Gotz, director general of European Aluminium, said in the association's statement.

"A suspension will boost Chinese imports with a high carbon footprint, endangering the EU's climate ambitions."

The carbon footprint of Europe's primary aluminum production is one of the lowest globally: approximately 7kg of CO2 per kg of aluminum compared with the Chinese average of 20kg of CO2 per kg, according to the association's findings.

Furthermore, the anti-dumping duties proposed were not prohibitive to trade, according to the association.

"Imports from China remain possible with a corrective lower duty (15%-20%), and there are many more available suppliers that do not dump: Norway, Switzerland, UK, Turkey, Russia, etc.," the spokesperson said.