The Aluminum Extruders Council (AEC) has led the U.S. aluminum extrusion industry in achieving level competition by winning tariff protection that offsets unfair trade practices of extruders/importers of aluminum profiles produced in China. Our efforts have been of enormous value to domestic extruders and suppliers. Conservatively, an estimated 800 million pounds per year of extrusions are being produced in the U. S. that would have otherwise been lost to China.
Many are questioning whether the recent drive by the Chinese
Extrusion Industry to export products off-shore, and particularly into the
North American market, is a long term play or simply a temporary solution to
satisfy a short term supply-demand imbalance while their domestic demand
It’s a great question and once you look at the data there is
an obvious answer and it is about supply and demand. Clearly the domestic
industry has been expanding its capacity well beyond the requirement to supply
domestic needs within China.
First of all let’s consider the domestic demand in China for
aluminum extrusions. In looking at the trend over the past decade, it has been anything
but anemic. With domestic GDP running well into the double digits over this
period, the demand for aluminum extrusions in the Transportation and Building
and Construction industries alone have been able to support a significant
increase in domestic capacity. So an increase in domestic capacity was
necessary. However as you will see below, the domestic industry has been
building capacity well beyond the rate at which demand has been escalating. And
it is highly unlikely given the current robust domestic demand trends, that the
Chinese industry is building capacity to significantly exceed what the industry
has been experiencing.
The next part of the equation is the supply or capacity
side. Based on research by the U.S.
International Trade Commissions (ITC) as part of the original fair trade case,
the Chinese domestic industry isn’t a lot different than the North American
industry, it’s just much larger. In terms of size, the ITC discovered that the
production in 2009 was just over 18 billion lbs. which is close to 4 times the
size of the U.S. industry. Similar to North America, the Chinese industry is
also fragmented with over 700 extruders making up the 18 billion lbs. of production
capacity. They have their “big dogs” as well, with 15 companies with more than
220MM lb. of production capacity and the largest one, Zhongwang, at 1.4 billion
lbs. Other than overall size, the big difference with our industry is the
magnitude of their expansion plans. In 2010, at the time of the ITC study, there
were 40 expansion projects on-the-go, which will add another 10 billion lbs of
capacity or an increase of almost 60 percent.
That’s right 10 billion lbs., more than twice the total
capacity of the US industry!
That will take them to over 28 billion lb. of capacity. Zhongwang continues to lead the show with “incremental”
capacity that will take them to a total of 1.8 billion lbs. When a Chinese extruder
expands, it isn’t like in the U.S. with the addition of a press or two. As an
example, the ITC discovered that the Haomei Aluminum Company is expanding by adding
450MM lb. of capacity over a three-year period. This size of expansion is
relatively common place with the capacity growth that we are seeing.
Exports from China increased over 10 fold since 2001 and
were estimated at 1.5 billion lbs. at the end of 2007. Very little of this went
into the US. That all changed in late 2008 and through 2009 as windows into
other markets such as Canada and Australia started to close due to new duties on
extruded aluminum imports from China being applied by those countries. That was
the time when we started to see the impact of what was clearly an “export
So clearly the Chinese industry is expanding its capacity well
beyond any thought that it will be absorbed by future increases in domestic
demand. Their expansion plans will take their capacity upwards of 28-30 billion
lbs., almost enough to supply the world demand. It is for this reason that the
ITC found that, not only was the U.S. domestic industry being harmed by the
influx of illegal Chinese imports, but that the infrastructure that is
currently being built in China is a Clear and Present Danger to the future
of our industry.
If there is any question about the ability, the
where-with-all and the strategy of the Chinese industry in terms of exports,
the math should make it clear. If we want our industry in North America to
survive, we MUST stay the course and fight for Fair Trade practices.
FAIR TRADE: It Matters!
To get involved, contact Rand Baldwin, President
of the Aluminum Extruders Council at firstname.lastname@example.org.
For more on the Aluminum Extrusion Fair Trade Initiative, visit www.aecfairtrade.org. This post was written by AEC Past Chairman Duncan Crowdis
In recent months there have been a growing number of reports about aluminum extrusions being imported into the United States from Vietnam. This recent spike comes at a time when the AEC is watching such reports and import data very carefully. Given the current policies of the Government of China to export their way out of their self-created overcapacity problems, the AEC is becoming more concerned about the prospect of transshipments from Chinese extruders through Vietnam.
AEC members are asked to contact Jeff Henderson with any reports gathered from the field regarding Vietnamese extrusions coming into the U.S. All reports will be treated in strict confidence. It must be determined whether or not there is a pattern in what is being imported. This pattern could appear in end use markets being targeted, names of the companies exporting product from Vietnam, types of extrusions and finishing, etc.
So, please let Jeff know what you are seeing in the field. He can be reached at 847.…
As noted in our post from October 23, the Aluminum Extruders Council filed a Circumvention and Scope Clarification case against China Zhongwang (ZW). Mounting evidence from private investigators, testimony from former employees, data from online import and export databases, and anecdotal evidence from a variety of reporters and other sources made it quite clear that ZW has consistently and systematically been exporting aluminum extrusions that are simply welded together into what are essentially aluminum slabs. While they claim these so-called ‘deep-processed’ extrusions are aluminum pallets, there is no evidence that ZW or any of its U.S. based operations market such a product. It is simply incomprehensible that a company would export hundreds of millions of pounds of these extrusions into the U.S. without even marketing them.
The feedback we’ve received so far indicate that ZW intends to do with these extrusions what they have done in Mexico and Vietnam with similar schemes: sen…
Our trade case continues to be extremely active, especially with the big news generated from the Dupre Analytics report. There are several issues to report that are changing with each week.
The Department of Commerce (DOC) has still not published the preliminary results from the 3rd annual administrative review. As you may recall, the rates published in June were incomplete and contained a major error. The DOC says they will come out with those rates in October, but it is looking like they may not do that, and instead, just publish their final numbers in December.
The fourth administrative review has begun. The DOC is selecting mandatory respondents now. They rejected our request to select ZhongWang (ZW). Their reasoning is that ZW is not the exporter of record in the trade data, so they can’t justify selecting them. Therefore, it is likely we will see some of the same Chinese extruders we’ve seen before.
We lost a couple of decisions involv…