European association says subsidized Chinese aluminum remains a problem

The European aluminum industry “needs additional instruments to address the harmful effects of Chinese subsidies” says Brussels-based European Aluminium, a trade group whose members include more than 80 producers of the metal.

The organization says it is calling upon the European Commission “to effectively address the distortive effects of foreign subsidies in the EU single market and help create a level playing field for the aluminum industry in Europe.”

European Aluminium says a proposed white paper on the topic “must be urgently translated into effective measures.” Adds the group, “The European aluminum industry is buckling under the pressure of subsidized excess capacity from China.”

States Gerd Götz, director general of European Aluminium, “The EU’s current trade toolbox is far from adequate to defend European industries against the aggressive approach of global powers such as China. The EU needs a more ambitious trade policy to level the global playing field, facilitate supply chain diversification within the EU, and reinforce our defense against unfair trade practices.”

The organization says the “unfairly subsidized” Chinese aluminum has led not only to what it calls “underpriced” Chinese exports, but the metal also has “a high carbon footprint, threatening the competitiveness of European producers and Europe’s sustainability ambitions.”

Most exported Chinese aluminum is made from virgin ore. While European Aluminium’s members include primary aluminum producers, it also includes makers of extruded, rolled and cast aluminum and other producers of recycled-content aluminum.

The organization as a whole has adopted a “Circular Aluminium Action Plan” designed to allow scrap to make up 50 percent of Europe’s aluminum feedstock needs by 2030.

Regarding action against emissions-heavy Chinese imports, Götz states, “The aluminum industry cannot afford to wait much longer.” He cites an (OECD) report that concluded that “nonmarket forces were responsible for some of the recent increases in aluminum smelting capacity, with detrimental impacts throughout the value chain.”

That report indicates that global aluminum companies received up to $70 billion in different forms of support from 2013 to 2017 period, with 85 percent of the documented subsidies going to just five Chinese firms, according to European Aluminium.

“State support has allowed Chinese producers to rapidly increase their production and export subsidized products at dumped prices, leading to global market distortions and depressed global aluminum prices,” states the organization.

Today, China produces 57 percent of the world’s primary aluminum compared to 11 percent in 2004, says European Aluminium.

“The Chinese aluminum industry has already built up massive volumes and is capable of entirely replacing the European aluminum industry if the EU does not act assertively,” states Götz.