US aluminum producers say Chinese firm evading import duties

US aluminum sector says Chinese firm evading import duties

China accounts for about half of the world’s aluminum supply thanks to cheap power and the world’s most efficiently built smelters.

An industry body representing the U.S aluminum sector has accused China’s Zhongwang Holdings, the world's second largest aluminum extrusion producer, of systematically and illegally evading import duties.

In a petition filed with the U.S. Commerce Department late last week, the Aluminum Extruders Council (AEC) alleges that the Hong Kong-listed producer has avoided payments by cutting and welding its aluminum extrusions into slabs so they would be classified as pallets — which are not subject to the same duties.

Extrusion is the process of shaping aluminum, used in the construction, transport, and automotive sectors, by forcing the metal to flow through an opening in a die.

The complaint comes at a rough time for producers of the lightweight metal worldwide, as prices have touched the lowest in six years, due to a global surplus.

The U.S. Department of Commerce has 45 days from the date of filing to decide whether it will launch an investigation, AEC said in a statement.

"We always export products under trade rules," the company said Monday, according to Chinese business paper The Standard. It added that products sent to the U.S. "are deep-processed ones excluded from anti-dumping and anti-subsidy rules."

Currently, China accounts for about half of the world’s aluminum supply thanks to cheap power and the world’s most efficiently built smelters. Established producers from North America to Russia and the Middle East are anxious about the Asian giant’s increasing influence, but do not want to cut capacity for fear of losing market share.

The filing is considered the first formal move to curb China's aluminum exports.

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