EC imposes definitive AD duties on EU imports of Chinese flat-rolled aluminum

The European Commission announced July 8 it will impose definitive anti-dumping duties of between 14% and 25% on imports of aluminium flat-rolled products (FRPs) originating in China, effective July 12. The duties are expected to be in force until October 2026, industry sources said.

The EC has decided not to prolong further a previously announced nine-month suspension of the definitive anti-dumping duties on the imports from China, it said in an official publication.

The final decision had been expected by the Chinese Nonferrous Metals Industry Association as far back as May. Chinese sources told S&P Global Commodity Insights that, in the short term, the new measure will not impact Chinese aluminum product exports to Europe, already reduced by trade issues in recent years, but could pose a challenge in coming years.

The EC opened an AD investigation into the imports on Aug. 14, 2020, finding during an initial period of investigation that the Chinese exporters were undercutting market prices by 17.3%. It imposed provisional AD duties of 14.3% to 24.6% on the imports April 2021, but then suspended these duties in October that year to allow further market surveys to take place before a July 11 decision deadline.

The further period of analysis among EU aluminum producers, importers and end-users including in the automotive industry between July 2021 and February 2022 demonstrated the price gap between the Chinese imports and EU sales prices had broadened, although it narrowed again to a 4-5% difference in January-February this year, according to the EC document.

In February, prices of the flat-rolled products imported from China averaged Eur3,871/mt ($3,943/mt), compared with an EU sales price of Eur4,077/mt, it said.

However, on the basis of the overall finding during the new period of analysis, the EC has now decided to impose the definitive AD duties on imports of the product from China.

The flat-rolled aluminum products impacted include plates and coils of between 0.2 mm and 6 mm, ≥6 mm plates as well as coil and strip with the thickness between 0.03 and 0.2 mm, except for aluminum sheet used in beverage cans, automotive panels, or aerospace applications.

EU demand seen 'weak'

The EC justifies its latest decision to impose duties on the basis that there is not currently any shortage of aluminum products in the EU as demand "peaked" in H1 2021 after the COVID-19 demand fall of 2020. Current demand, particularly from the EU automotive sector, continues weak due to shortages of semiconductors and wiring harnesses originating from Ukraine -- a situation which could last several more months -- while future demand levels from the construction industry are now becoming more uncertain due to high inflation levels. Moreover, EU aluminum producers are at present working at around 80% of installed capacity and could therefore produce more themselves, it said.

Sector little impacted by Russia sanctions

"According to the Union industry, there is no shortage of primary or semi-finished aluminium, in spite of the sanctions against Russia, which, even though they do not concern directly aluminium products, have a strong negative impact on trade with Russia in general," the EC wrote in its document. "It appears that demand peaked in the 1st semester of 2021. This is shown by the orders intake which....decreased by 12% during the (latest) period of analysis when compared with the 1st semester of 2021."

Even before this year's new sanctions against Russia, EU industry had already reduced its imports of metal from Russia, including primary aluminum, from 22% of the total in 2015 to around 11% in 2021, the EC document noted.

The EU market share of the imports from China was around 8% during the initial period of investigation and more than 6% in March 2022, in which month these imports amounted to 13,832 mt, the document said.

EU association applauds move

European Aluminium, the industry association representing the aluminium value chain in Europe, said in a statement it welcomed the "long-overdue step" of reinstating the AD duties on Chinese flat-rolled aluminum, which, it said, "will raise the dumped prices to market conformity."

The association moreover called for "Europe's push towards strategic autonomy in aluminium.... with a robust industrial strategy that prioritises value chains based on their contribution to the European Green Deal..... China's excessive state subsidies have played a major role in building China's aluminium industry, which holds a 60% global market share," it claimed.

According to independent sources, primary aluminum production in the EU has declined more than 30% since 2000 due to factors including high costs and carbon leakage.

London Metal Exchange's cash aluminum price closed at $2,416.50/mt July 7, after several weeks of sustained decline.