With a buoyant domestic market for aluminum extrusions and punitive export taxes on most profiles, you would not expect to see China in export markets, but while they have been conspicuous by their absence in Europe, they still appear to be very active in Southeast Asia. So much so that Australian producer Capral has asked the Australian Customs and Border Protection Service to investigate if an anti-dumping duty is appropriate. A decision will not be taken before April. However, in the meantime, a 16 percent import duty is being applied to Chinese aluminum extrusions. China takes about a third of the 155,000-ton Australian market. Capral takes another third and the rest are assorted suppliers.
Australia’s action follows on the heels of Canada’s anti-dumping and countervailing duties applied in March of this year that, combined, came to be between 2 and over 100 percent, depending on the size and grade. As global trade has fallen, so have China’s aluminum exports, by some 36.6 percent in the first nine months of this year, to 950,000 metric tons. In the spring, India slapped duty rates of 21 percent on flat rolled products and 35 percent on foil products following complaints by state owned National Aluminum Co. and Vedanta’s Bharat Aluminum Co., according to a report in Bloomberg. Rates were subsequently adjusted to 14 percent and 30 percent, respectively, in June.
It has to be said that with a primary aluminum price in China some 17-20 percent more than the world price due to domestic VAT rates of 17 percent (plus a fluctuating SHFE premium over LME prices), and then suffering an export duty of either 5 percent for bar products under 2.6 diameter and 15 percent for bar products over 2.6 diameter, it is hard to see how the extrusion mills are exporting at a profit. Not that profitability comes into it. Anti-dumping requires proof of material harm to the domestic producers, which with extruders around the world unable to fill capacity, is not hard to prove.
Although construction and automotive are both showing substantial growth in China to the tune of 17.7 percent in construction and 32 percent in automotive over the first three quarters of 2009 compared to a year earlier, extrusion presses are still not running at capacity. If stimulus measures were to be eased and production drops back, the industry would have a severe excess of capacity and then we should expect the export taxes to be withdrawn to stop extruders closing down. For the sake of extruders in Europe and North America, let’s hope the domestic China market keeps rolling and the global market remains in some semblance of order.
–Stuart Burns
