Aluminum-industry representative Jeff Henderson says he is convinced that China Zhongwang Holdings Ltd., a Chinese aluminum giant controlled by billionaire Liu Zhongtian, tried to evade U.S. tariffs by routing aluminum through Mexico to disguise its origins, a tactic known as transshipping.
Nearly one million metric tons of aluminum was discovered stockpiled neatly stacked behind a fortress of barbed-wire fences in rural San Jose Iturbite, Mexico two years ago. The stockpile is worth around $2 billion and represents roughly 6% of the world’s total inventory and it quickly became an obsession for the U.S. aluminum industry.
“My Moby-Dick has been Zhongwang,” Henderson, president of U.S. trade group the Aluminum Extruders Council told the Wall Street Journal.
U.S. executives contend that the mysterious cache was part of a brazen scheme by one of China’s richest men to game the global trade system.
Zhongtian denies any connection to the Mexican aluminum or transshipping, but company records, trade documents and legal filings reviewed by The Wall Street Journal, along with interviews of people who have done business with Mr. Liu, raise doubts about his account.
The Commerce Department says it is investigating the Mexican aluminum’s origin now as part of a slew of trade complaints by the domestic metals industry against China, many of which include allegations of transshipping.