Aluminum industry suffers US backlash

As US authorities have targeted Chinese aluminum products with a preliminary raft of anti-dumping and anti-subsidy duties, industry producers are beginning to feel the squeeze.

According to customs figures from Foshan, Guangdong Province, aluminum product exports have dropped from 3,117 tons in August to 1,150 tons in October, representing a sharp two-thirds decline.

"We stopped exports to the US two months ago due to the pressure," Ding Dan, director of the exports department of Guangzhou-based Xingfa Aluminum Holding Ltd, told the Global Times Thursday.

"Our profit margin stands at between 5 to 7 percent. Once we start exporting, we will take losses," Ding added.

In October, the US government said it wanted to slap anti-dumping duties on Chinese aluminum products, a move boosting both a group of US aluminum producers and the United Steelworkers union, according to the report by the Wall Street Journal.

The proposed duties, which require further action by the International Trade Commission, could add 59.31 percent to the cost of Chinese aluminum extrusions, said the report. Extrusions are removed from aluminum alloys and are a major construction material

As of August 31, the US Department of Commerce also made an accompanying preliminary anti-subsidy ruling, imposing a punitive tariff ranging from 6.18 percent to 137.65 percent on imports of the metal from China.

In total, most aluminum exporters must accept a staggering 196.96 percent mark-up on duties.

"We have ended cooperation with our partners in the US for more than 10 years, and they are heart-broken," said Ding.

"Aluminum exporters are mostly private companies and receive no subsidies," she added.

China is the world's largest exporter of aluminum extrusions. Between 2007 and 2009, imported aluminum extrusions to the US rose by 90 percent. The sector was worth $514 million in 2009, the 21st Century Business Herald reported Thursday.

"The US government has maintained anti-dumping measures on Chinese products for years, connected to the appreciation of the yuan, or to China' trade surplus with the United States ," Huo Jianguo, director of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, Thursday told the Global Times.

A final decision concerning these anti-subsidy and anti-dumpling measures is expected for January next year.

Ding said her company is focusing on the European Union and Southeast Asian markets to avoid the trade protection risks, as "the US market only accounts for five percent of exports."