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November 2015 Update: U.S. Fair Trade Case against China

We have had a great deal of activity recently on the Fair Trade front. Over the last few weeks, the Aluminum Extruders Council (AEC) Fair Trade case has:

  1. Requested a full investigation of allegations that Zhongwang (ZW) is transshipping aluminum extrusions through Vietnam and Malaysia into the U.S. in a plan designed to evade duties.
  2. Filed a Scope Clarification and Circumvention case against ZW at the Department of Commerce (DOC).  The AEC claimed ZW has not paid duties on subject merchandise they have brought into their warehouses in Southern California and then shipped to their facility in Delair, NJ only to be re-melted into billet.
  3. Received the post-preliminary results from the DOC on the CVD side of the 3rd annual review.
  4. Launched the 4th annual review process.
  5. Continued to push the DOC for a November decision on the 5050 alloy scope request.

Please see our special report on the first two items.  This is a major undertaking for the Council and the first time we have confronted ZW about the dozens of reports we’ve received about their shipments to the U.S.

The Third Administrative Review is set to be complete, and the final results released, before the end of the year.  In the meantime, we finally received the preliminary results on the countervailing duty side of the case.   Those results are fantastic for our case.  The rates actually went up for the first time since we won the case.  The post-preliminary results deliver a CVD rate of 22% vs. the 9% rate we’ve had the last two years.  The reason for the increase is based on the respondents that the DOC recruited for this year’s review.  One of them supplies extrusions for the curtain wall industry.  Since their shipments included glass and components, those items were a part of the calculation.  This is a great win for us.  The AD side should be announced soon.  We also expect to hear good news on that one.

We continue to push the DOC to make a decision on the 5050 scope request.  They are telling us they will announce that decision in November.  Since we plan a November meeting with the DOC, we will push on this again, if they haven’t announced a decision.  With the filing of the ZW case, we are also pulling the 5xxx alloy issue into our circumvention argument.  The idea here is simple, either the heat-treated so-called 5xxx series alloy extrusions are really 6xxx series disguised with some modest chemical changes and thus covered by our orders, OR this is simply a circumvention scheme to avoid duties.  Either way, we win.  I think news of this pending decision has seeped into the market.  I’ve received a few reports that some orders are returning to U.S. mills in the last few weeks.  If someone places an order today for this alloy, by the time it reaches a U.S. port it may very well be subject to duties!

The news continues to be good for our industry on the trade front.  Our Council’s profile is increasing in D.C. as we continue to defend our case.  This month, we actually went International.  Sapa volunteered to represent the AEC at two World Trade Organization panels in October.  These events were developed to educate the EU on issues of concern regarding China’s attempt to be recognized as a market economy.  We stood with many members of the steel industry and the European aluminum industry when making our case.  Thanks to Jason Weber of Sapa for making the trip.

Please stay tuned for more developments in the next few weeks.  I’ll be reporting on our trip to D.C. in a couple of weeks, we will be sending out a House letter for members to take to their Congressmen, and the results of the third administrative review will be announced.  So, again, thank you for your continued support.  Now more than ever we must stand together!

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