US set to impose duties on aluminum

The US Commerce Department said it will move ahead to impose anti-dumping and subsidy duties on aluminum products imported from China, a move which is likely to hurt Chinese exports to the United States.

The department said it had found 29 Chinese companies selling extruded aluminum products, which are used in cars, houses and manufactured goods, to the US market at 33 percent cheaper than fair value.

Anti-dumping duties will range from 32.79 percent to 33.28 percent, and countervailing duties on the imports of Chinese-made aluminum extrusions will range between 8.02 percent and 374.15 percent, the US department said in a statement to the media.

Chinese exporters are required to deposit the duty owed until a final ruling. The matter still has to be determined by the US International Trade Commission, which is scheduled to meet in May.

China exported $503 million of extruded aluminum products to the US in 2010, down from $514 million in 2009.

"If anti-dumping duties and anti-subsidy duties together are over 20 percent, there is no profit for aluminum producers. It definitely will affect Chinese companies' that export to the US," said an industry insider who declined to be named.

"We've already stopped the export of products that are included in the scope of dumping and subsidy duties," he said.

The US government imposed countervailing duties ranging from 6.18 percent to 137.65 percent in August 2008 and anti-dumping duties totaling 59.1 percent in October 2010.

In 2007, Chinese-made aluminum extrusions only accounted for 8 percent of the US market. That number had jumped to 20 percent by 2009.

Wang Baodong, a spokesman for the Chinese embassy in Washington, told Bloomberg News that the move to impose duties is "particularly unwelcome" and "is not conducive to the health of our trading relations".

China Zhongwang Holdings Ltd, Asia's largest maker of aluminum extrusion products, reported a 26 percent decline in profit in the fiscal year 2010 due to a decline in export sales resulting from the US anti-dumping and countervailing duties investigations.

"We expect a proportion of exports to the US to drop further this year and the company will develop other markets to achieve better balanced global distribution," said Lu Changqing, vice-president of Zhongwang.

The company will further explore the market in Canada and Mexico, and tap new markets in European countries, he said.

In order to avoid risks from trade friction, Zhongwang will also look to domestic growth to raise its market share to 70 percent from 55 percent during the next two years.