Aluminum Association to Commerce Department -- No 232 Product Carve Outs
ARLINGTON, VA -- Aluminum Association President & CEO sent a letter to Commerce Secretary Wilbur Ross today responding to recent requests to "exempt rolled can sheet, as well as the primary aluminum and ingot milled into rolled can sheet, food and beverage cans, bottles, lids, and closures" as part of the president's recently initiated Section 232 investigation into the national security implications of imported aluminum.
The association believes that broad product exclsuions like these "are very likely to become means of entry for all Chinese products, as products can be misclassified when entering the U.S. market" and "excluding can sheet products will likely result in China transferring its production from other rolled products to can sheet products."
The domestic aluminum industry is united in its belief that any outcome of the 232 investigation must focus on addressing the fundamental issue of Chinese aluminum overcapacity which is hurting producers up and down the industry value chain.
The full letter is here and text is below.
- Broad exclusions are very likely to become means of entry for all Chinese products, as products can be misclassified when entering the U.S. market. Widespread reporting documents such fraudulent practices already involving Chinese-origin aluminum.
- Excluding can sheet products will likely result in China transferring its production from other rolled products to can sheet products. From 2012 to 2020, Chinese capacity of aluminum rolled products is expected to have increased at an annual rate of 9.3 percent; however, China’s consumption is expected to only grow at an annual rate of 6.8. This overcapacity is forecasted to reach 7.0 million metric tons (MMT) by 2020. For comparison, the entire North American rolled product market was 4.2MMT in 2016. This excess capacity is increasingly being exported to other Asian countries and to the U.S., where imports of aluminum sheet have more than tripled from 2012 to 2016, and have captured almost 10% of the U.S. market.
- Health of the domestic industry relies on both high value-added products (such as products used in national defense) and higher volume products (such as can and automotive sheet), because large installed capacity at our plants requires substantial volumes to cover fixed cost. Excluding can sheet would directly impact competitiveness of these higher volume products, which would then affect our capacity to invest in our U.S. plants and especially in our offerings for national defense, which represent around 5% of our revenue in the United States.