e U.S. International Trade Commission said Wednesday that it will investigate the global aluminum trade and its impact on the U.S. aluminum industry, an inquiry that could help pave the way for new import tariffs.
The ITC said it would look into foreign government policies that drive overproduction, a swipe at China, which has drastically increased output of the metal this century, contributing to falling prices and the closing of U.S. smelters.
The ITC said it would hold a hearing Sept. 29 and deliver its report to the House Ways and Means Committee by June 24, 2017. The investigation was requested by a letter sent to the ITC in February by the committee. House Ways and Means Committee.
Century Aluminum Co., one of the last smelter operators in the U.S., and the United Steelworkers union, which represents thousands of workers in the industry, have been lobbying the U.S. government for such an inquiry. They have also asked the U.S. government to file a complaint to the World Trade Organization.
In a statement, the Aluminum Association said that ¡°overcapacity, particularly in China, is of paramount concern to the aluminum industry¡± as are ¡°questionable trading practices¡± that have hurt U.S. producers.
U.S. producers have said they have vidence showing that some Chinese aluminum producers have received billions of dollars in subsidies, including access to loans below market rates.
Chinese officials have denied overproduction, saying the problem is weakening demand because of a tepid global economy.
Chinese aluminum exports have soared to $23.8 billion in 2015 from $6.2 billion a decade ago, helping prices to fall 40% in the past five years, to $1,500 a metric ton from $2,500 a metric ton. In 2015, China produced 32 million tons of the metal, accounting for more than 50% of global aluminum production, double the level in 2005.
Meanwhile, the U.S. is importing more aluminum than ever. U.S. imports last year accounted for an estimated 40% of U.S. consumption, compared with 14% in 2010, according to the U.S. Geological Survey.
By the end of this year, only four aluminum smelters are expected to remain operational in the U.S., down from 23 in 2000, leaving annual U.S. aluminum output at 565,000 metric tons, down from 2.1 million tons five years ago and 3.7 million tons in 2000, according to the CRU Group.
Hong Kong-listed China Hongqiao Group Ltd., has become the biggest aluminum producer in the world, surpassing Russian behemoth United Co. Rusal PLC.
Some Chinese companies have already come under fire from U.S. authorities. The Commerce Department last month said it would investigate China Zhongwang HoldingsLtd. for trying to avoid U.S. import tariffs by transshipping aluminum through third countries.
China Zhongwang and China Hongqiao declined to comment. China¡¯s Commerce Ministry didn¡¯t respond to a request for comment.
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