The Financial Impact of the China Trade CaseNearly five years ago the industry came together under the leadership of the Aluminum Extruders Council to develop a strategic plan for the industry. This plan was designed to expand the extrusion market in North America. It contained defensive and offensive elements. The defense strategy took aim at protecting our market from illegal and unfair trade practices causing an explosion of imports into the U.S. market in 2009. Our offense strategy developed industry promotion actions intended to expand and promote the use of aluminum extrusions. As these strategies were executed, the United States economy began its slow yet steady rally from the depths of the Great Recession. I’d like to illustrate how those elements worked together to deliver over one billion more pounds in aluminum extrusion shipments in 2013 compared to 2009. This 32 percent increase in volume has led to extruders investing more than $700 million in the last two years. In short, our industry has experienced its greatest impact from the China Fair Trade Initiative compared to innovation or economic recovery. This analysis will show how approximately 700 million pounds of the over one billion pounds of growth we enjoyed in 2013 came from the Fair Trade Committee’s work.
According to the Aluminum Association, Apparent Demand Shipments
totaled 3.3 BN lbs in 2009 and 4.4 BN lbs in 2013. During the same period,
domestic producers increased shipments from 2.9 BN lbs to 4.2 BN.
The data is quite clear on the impacts of imports to the U.S. market. Imports fell from their high of 488 million pounds in 2010 to nearly half that level in 2013. While this nets out 200 million pounds, it is more impressive to see the drop as a percentage of our overall market. Imports took 14.9% of our market in 2009 and fell to only 5.8% in 2013. Also noteworthy, imports reached a U.S. market share of 21% in December 2009 and fell to 5.4% in December 2010. The final preliminary ruling took effect in October of 2010 and literally stopped Chinese imports in their tracks. While the historic data tells us that 200 million of the one billion pounds realized in 2013 vs. 2009 was straight from the loss in Chinese imports, it must be recognized that the run rate for Chinese extrusions was picking up steam when it hit 21% of the U.S. market before the industry filed its petition in early 2010. Most industry experts agree that the rapid growth in imports from China would have continued to capture market share, further crippling our industry.
From July 1, 2009 to July 31, 2010 imports totaled nearly 700 million pounds, which is an average monthly run rate of almost 54 million pounds. Given that in 2013 the market itself grew 16% higher than an annualized rate of the July 1, 2009 to July 31, 2010 time period, Chinese extrusions could have taken nearly 650-750 million pounds of the 1.05 billion pounds of growth we saw in 2013. This assumes Chinese imports ONLY grew at the same rate the market grew.
According to the Aluminum Association & other import documentation, imports from China
peaked at 19% market share in 2009. However, imports came to a stop once duties
were imposed in October 2010. Since then, imports from China have been negligible.
Using an annualized rate based on imports from 7/1/09 to 7/31/10,
estimated innovation impacts since 2010, and crediting remaining
difference as economic stimulation, it's clear trade was our greatest win.