China: Changes in export duties of
 downstream aluminium

Jeff Henderson, AEC Director of Operations, and director of the Council’s Fair Trade Committee remarked: “The decision by the Chinese Government to remove export duties on downstream aluminium products is troubling for the global aluminium market and is outside the scope of the World Trade Organisation’s (WTO) findings on rare earths, tungsten, and molybdenum. This action represents a targeted attempt to use foreign markets to relieve pressure on China’s struggling aluminium producers.

“Over the last decade, producers outside of China have made painful adjustments to market conditions by rationalising operations – closing facilities, worker layoffs, etc. The global market, other than China, has returned to a delicate balance as a result. In China, however, producers have ramped up production and capacity for the last 15 years regardless of what global markets could sustain. The relentless expansion of China’s aluminium industry is almost entirely responsible for global supply gluts.

“Now, instead of addressing its oversupply and overcapacity problems as it should – by eliminating state support and allowing unprofitable producers to exit the market – it looks like China intends to export its problems by opening the floodgates and forcing the rest of the world to make the tough choices and suffer the impact of its misguided domestic policies. Tellingly, this announcement did not remove export restraints on all aluminium products, but only on certain processed products. For example, the 30% export tax on primary unalloyed aluminium ingot remains in place. This is further evidence of strategic government intervention in trade flows to support domestic industries at the expense of foreign producers.”

Posted in Industry.