US petition targets Chinese foil

The USA’s Aluminum Assn is seeking anti-dumping and countervailing duties against aluminium foil imports from China, the trade group said in a March 9 petition filed with the US Commerce Department and International Trade Commission (ITC).

The petition alleges anti-dumping margins of between 38% and 134%, claiming that Chinese producers also benefit from 27 separate government subsidy programs.

The petition is targeting Chinese aluminium foil in thicknesses of less than 0.2 millimetres, or less than 0.0078 of an inch, in reels weighing more than 25lb and that is not backed, etched for use in capacitors or cut to shape.

Chinese producers of aluminium foil have been exporting large volumes of “unfairly low-priced and subsidised merchandise to the USA that have devastated conditions in the US market,” the Aluminum Assn said.

“Today’s action marks the first time the Aluminum Assn has filed unfair trade cases on behalf of its members in its nearly 85-year history,” Heidi Brock, president and ceo of the group, said in a statement on March 9.

“This unprecedented action reflects both the intensive injury being suffered by US aluminium foil producers and also our commitment to ensuring that trade laws are enforced to create a level playing field for domestic producers,” she added.

“First and foremost, the facts in the market today support an [anti-dumping/countervailing duty] case on aluminium foil,” a spokesman for the Aluminum Assn told Metal Bulletin sister title AMM via e-mail. “The impacts of Chinese overcapacity are increasing and we must pursue a rules-based global trading system that creates a level playing field for producers along the entire value chain.”

US imports of Chinese aluminium foil have grown by nearly 40% since 2014, accounting for about 71% of total aluminium foil imports last year.

“Our action today reflects not only the acute challenge faced by the domestic foil market, but also this industry’s broader commitment to use all of the tools at its disposal to ensure a level trading playing field for domestic producers,” the spokesman said.

Should the US Commerce Department follow through with an investigation, then it presumably would put US rolling mills in a position to be competitive once more, one analyst said. However, it might require US mills to update their operations considerably, he noted.

“There’s very little light-gauge foil produced in the USA,” Lloyd O’Carroll, an independent analyst and economist, told AMM. “The stuff that’s coming from China is [made by] state-of-the-art equipment and [is] high quality. […] There may need to be some additional capacity added [in the USA].”

However, Chinese aluminium foil is currently much cheaper than US product, which puts domestic producers at a disadvantage when trying to compete. Nevertheless, US companies could rise to the occasion and make a better product as cheaply, if the money is spent on new technology.

“It doesn’t take that long to install a new mill,” O’Carroll said, predicting that new mills could be built in the USA containing up-to-date production technology within the next few years. “While it would take some time to adjust to the new plans, some volume could be taken on immediately.”

New York-based Kelley Drye & Warren LLP serves as the Aluminum Assn’s legal counsel in the petition.

The US Commerce Department now has 20 days to determine if it will launch an anti-dumping and countervailing duty investigations, with a preliminary determination of material injury or threat due from the ITC within 45 days.

Separately, Globe Specialty Metals Inc, a subsidiary of Ferroglobe plc, on March 8 filed the first trade case under US president Donald Trump’s administration on March 8. That petition is seeking anti-dumping and countervailing duties against silicon metal imports from four different countries.