Steel Products Prices North America

MSCI Decries Section 232 Actions that Could Harm Aluminum Trading Partners

June 25, 2017

“Countries like China are clearly at fault for the decline of the North American aluminum industry,” said M. Robert Weidner, III, president and CEO of the Metals Service Center Institute, in written testimony to the Commerce Department on June 23. “China’s share of the world primary aluminum market rose from 10 percent in 2000 to a stunning 55 percent in April 2017. It’s important the Trump administration remember who the true culprit is and not propose remedies that will harm the United States’ North American trading partners.”

In its testimony, in light of the Section 232 investigation, MSCI advised that any remedies imposed by the Trump administration should:

* Not upset the U.S. aluminum industry’s strong and beneficial trading relationship with Canada and Mexico;

* Provide the same relief for upstream and downstream domestic producers; and

* Give the aluminum industry the time it needs to invest in and establish necessary domestic production capability.

MSCI’s testimony noted that China’s 55 percent share of the world aluminum market is even greater than its share of the global steel market. There is evidence that, in attempt to circumvent current duties, Chinese and other producers are simply processing aluminum into aluminum parts. All of these factors, the testimony explained, have resulted in significant U.S. job losses.

“These job losses and plant closures aren’t due to the United States’ inability to produce aluminum and aluminum products,” Weidner said. “Our domestic industry can compete with anyone when there’s a level playing field. But as President Trump noted in his memo launching this investigation, artificially low prices caused by unfair trade have discouraged long-term investment. This has hurt our economy and jeopardized our ability to meet America’s national security needs. Countries like China cannot be allowed to continue to violate the principles of free and fair trade.”

The decline of service center shipments leaves no question that the U.S. aluminum industry has suffered from unfair trade practices. Aluminum shipments from MSCI member companies in 2016 were still 20 percent below the peak reached prior to the 2008 great recession. While service center shipments are slowly recovering, they have not yet returned to pre-2008 recession levels.