Dive Brief:
- The United States Steelworkers Union and Chicago-based Century Aluminum are calling on the federal government to investigate whether China is violating international rules by subsidizing aluminum manufacturing, believing such a probe would uncover billions of dollars in Chinese subsidies and access to low-interest loans.
- U.S. imports of semi-fabricated aluminum from China spiked 181% in 2012 through 2015, according to The Wall Street Journal. Aluminum exports from China climbed from a $6.2 billion value in 2006 to $23.8 billion in 2015. A bulk of the aluminum exports are funneling into the U.S.—395,000 metric tons of it in 2015, up 36.7% from 2014 shipments, according to United States Geological Survey statistics.
- Should a U.S. government investigation confirm the allegations of subsidies, documentation would probably be sent to the World Trade Organization (WTO) to get approval to take action to halt shady unaccepted global commerce practices.
Dive Insight:
China has traded more metal than it can handle, at least in its own country, and production cycles in China affect the rest of the globe, including the U.S., where scrap metal exports dropped 4.7% in the first half of 2015 compared to the same period in 2014, according to the Journal of Commerce.
A Chinese embassy spokesperson said to The Wall Street Journal that all WTO members "should strictly abide by the WTO rules, and use trade remedy measures in a prudent, restrained and rules-compliant way."
Despite the U.S. surplus of metals from a robust automotive industry and an active construction niche, primary aluminum production dropped 7.2% in the U.S. in 2015, and secondary alloys production dropped 2.4%., while China’s metal producers are prospering. But China is not the only driver; according to Recycling Today, Canadian smelters have played their role, shipping more than 2.8 million tons of aluminum to the U.S. in 2015 — seven times that imported from China.
