Aluminium supply special – Anti-dumping issues, bankruptcy and more
2014 aluminium round bar, 6082 aluminium square bar, 7075 aluminium plate and more… we’re still selling it, and our customers are keen to buy it. But there’s trouble in the world’s aluminium supply sector. In our aluminium supply special we’ll take a look at a deadly accident spectacularly avoided, troubled times for UK aluminium manufacturers, issues with Russian aluminium, and the failure of Asia’s biggest aluminium producer and extruder, China Zhongwang, which has filed for bankruptcy.
Swiss aluminium worker survives 720 degree dunking
A Swiss man has survived after falling into a 720°C tub of molten aluminium, and it’s being called ‘miraculous’. The 25 year old electrician apparently plummeted through a trapdoor into a container of searing hot molten metal in a factory in St Gallen, Switzerland. That’s what we call lucky.
UK aluminium manufacturers worried about anti-dumping
Here in the UK, players in the aluminium sector are concerned about proposed UK anti-dumping duties on Chinese aluminium extrusions, saying they’re too low and will drive a flood of imports, factory closures, and job losses. The Financial Times goes as far as calling it a potential ‘wipeout’ for the UK’s aluminium sector.
5 EU industry associations protest about sanctions on Russian aluminium
A total of five EU industry associations have urged European authorities to prevent sanctions, tariffs and boycotts against Russian aluminium because doing so might put thousands of aluminium-related companies out of business. Russia’s Rusal makes about 6% of the world’s aluminium, so far unsanctioned by the West, but the USA is thinking about placing tough restrictions on Russian aluminium imports and the London Metal Exchange is asking its members whether it should ban Russian metals from the system altogether. At the same time, some businesses are saying they won’t buy aluminium from Russia, others say they’ll keep on buying.
Arconic divests 100% of its Russian operation
The USA-based aluminium products manufacturer Arconic has just closed a $230m cash deal to divest responsibility for all of its Russian operations to Promishlennie Investitsii, the majority owner of the country’s state-supported metals firm VSMPO-AVISMA. It stopped new Russian contracts back in March 2022, because of the Ukraine war, and plans to sell its Russian operations off altogether in May 2023.
Aluminium producer and extruder China Zhongwang files for bankruptcy
They’re massive. The US government turned them down as a potential buyer for the former Aleris, eventually bought by the Hindalco Industries subsidiary Novelis Inc. Now they’ve filed for bankruptcy. The aluminium producer and extruder China Zhongwang, Asia’s biggest, has submitted a bankruptcy petition in its home province of Shenyang in China.
China Zhongwang Aleris bid failed thanks to concerns raised by the USA’s Committee on Foreign Investment in the United States. The company had already run into trouble from the US Department of Justice over a plan to send semi-finished aluminium to the US in pallet form, even though there weren’t any buyers for the pallets. They apparently intended to re-melt the metal to avoid import tariffs.
August 2021 saw the Department of Justice announcing six California-based companies involved had been convicted by a federal grand jury of scheming to avoid import duties via the scam. Worse still, the aluminium extrusions they imported were simply spot-welded together so they looked like pallets. The Liu-controlled companies didn’t sell a single ‘pallet’ between 2011 and 2014.
Experts say the company’s problems were worsened by a dramatic acquisition spree that took it way over its limits. One buy, an Australian luxury yacht maker, probably failed to deliver a single penny in profit. At the end of the day China Zhongwang was estimated to have a whopping $64 billion in debts, compared to less than half of that in assets. Dodgy market conditions in China’s construction sector may have made things even worse.
A report by Metal Miner speculates that sections of Zhongwang Holdings could be taken over by Chinese state owned companies rather than stop supplying aluminium altogether. It’s likely since it isn’t unusual for struggling companies in China to get bailed out when jobs are at risk, even if it doesn’t make sense financially.
Buy from your trusted UK aluminium supplier
As experienced aluminium suppliers we’ll be keeping an eye on the situation, and we’ll keep you posted. In the meantime walk this way for quality aluminium in a multitude of forms, plus brass, steel, copper and more.
THE LATEST FROM THE BLOG