Here’s what’s been going on in the long-lived aluminium supply battle between China and the rest of the world.
China Trade Task Force visits the UK
In early May the China Trade Task Force multinational campaign group visited London to demand an end to damaging illegal Chinese aluminium subsidies, asking the EU and UK to pressure the World Trade Organisation into urgent action.
The Chinese aluminium industry has already led to a 38% decline in smelting within the EU and over nine thousand aluminium workers in Europe have been laid off as a result. In the UK 1640 aluminium jobs have been lost thanks to China’s illegal aluminium subsidies, that have also led to an uneconomical aluminium industry in China. The great illegal experiment has, by all accounts, failed.
When China first joined the WTO they made just over 10% of the world’s aluminium supplies. Now it’s more than 55%. The CTTF has written an open letter to the UK government about the crisis, calling for them to stand up for the rights of European aluminium workers. At the same time things seem to be changing slowly but surely, as evidenced by two more pieces of recent news.
US Commerce Secretary fires a broadside at Chinese aluminium
US Commerce Secretary Wilbur Ross is getting defensive about his nation’s ongoing fight with China, insisting that the latest investigation into US aluminium imports is not a “China-phobic program”. According to him it’s a “global problem.”
The latest investigations fall under the Trade Expansion Act 1962, which allows a US president to act against imports if he or she feels national security is under threat. Last time they examined US steel imports, now it’s aluminium’s turn. And it looks very like the investigations are indeed about China, whatever the official story is.
The US appears to be determined to force China to act on its huge over-capacity and the unfair subsidies given to China’s aluminium sector, earlier raised by President Obama and the World Trade Organization.
Aluminium the ‘best performing’ metal for 2017
At the same time it looks like aluminium is the year’s best performing industrial metal. And it’s all down to a growing hope that China will end its supply glut, forcing aluminium prices higher. This year has already seen the price of aluminium rise almost 15% compared to less than 3% for zinc and just over 3% for copper.
Since the 2008 financial crisis, a supply glut has been dogging the market thanks to China’s enormous production capacity and state-of-the-art smelting tech. Now there are finally signs that the country is taking its dysfunctional aluminium industry to task, with an anticipated shift in their approach to supply leading to hopes of an eventual deficit.
So far this year China has promised to shut down aluminium capacity in winter to help reduce air pollution. They’re also planning to crack down on illegal production and have already suspended construction of three new smelters. How come? According to Morgan Stanley, “The aluminium industry has been unprofitable and a key contributor to pollution in China.”
As metal stockists we keep our fingers on the pulse so we can give our customers the very best advice and the best prices. If you’re searching for a reliable, expert British metal supplier, we’ll be delighted to help.
THE LATEST FROM THE BLOG