CRU aluminum news roundup: Tariffs, sanctions, and more

Written by Matthew Abrams

Here’s a roundup of the latest news in the global aluminum market from our colleagues at CRU.

Biden calls for tripling of Chinese steel and aluminum tariffs

President Joe Biden is calling on the US Trade Representative (USTR) to consider increasing the existing section 301 import duty on Chinese steel and aluminum three-fold. The current average levy is 7.5%.

“American workers continue to face unfair competition from Chinese imports of steel and aluminum products, which are among the world’s most emissions-intensive,” his administration said in a supporting factsheet. It also added: “Chinese policies and subsidies for their domestic steel and aluminum industries means high-quality US products are undercut by artificially low-priced Chinese alternatives produced with higher emissions.”

Furthermore, Lael Brainard, director of the White House’s National Economic Council, was quoted by the Wall Street Journal: “In manufacturing sectors like steel, China’s already producing more than China or the world can easily absorb … China’s subsidies and other forms of support lead to exports flooding global markets at artificially low prices, undercutting American steel.”

In this presidential election year, Biden is also directing trade officials to work with Mexico to jointly prevent China and other countries evading US steel and aluminum tariffs by importing via Mexico, arguing that is a growing challenge which must be addressed. Mexico’s economy ministry has said it will prepare measures to strengthen definitions on steel being shipped into the country, while steel sector association Canacero has denied the so-called ‘triangulation’ is taking place.

EA and Rusal react to new sanctions

The European Aluminium association published a statement following the new sanctions imposed on Russian aluminum. The association welcomed the sanctions and urged the EU to take comparable actions.

European Aluminium noted that failure to do so would leave the EU in “the bizarre position of being alone among Western powers in continuing to finance Russian aggression through the purchase of aluminum.” Doing nothing also would undermine the competitiveness of European producers, the association said.

“The risk of the EU market being flooded with products from third countries, produced using heavily discounted Russian metal, is greater than ever,” the EA warned before adding: “Failure by the EU to react decisively to these latest developments would be an ethical, strategic, and economic disaster that Europe simply cannot afford.”

Russian producer Rusal also reacted to the news by downplaying the impact of the sanctions on its activities.

“Rusal will remain capable of providing hedging services to our customers and remains committed to market-based pricing,” the company said before adding that these actions will have no impact on its ability to supply since Rusal’s global logistic delivery solutions, access to the banking system, overall production, and quality systems are not affected.

Rusal also noted that the US determination does not impose any new prohibitions or requirements relating to the processing, clearing or sending of payments by any intermediary banks. Also, it stressed the LME acknowledgment that a still large proportion of the market is willing to take delivery of Russian aluminum.

Anti-trust worries delay Russel’s acquisition of service centers

Toronto-headquartered Russel Metals said its proposed purchase of seven metal service centers from compatriot Samuel, Son & Co. has been held up because Canada’s competition bureau has concerns “related to a narrow segment of product in a specific geography.”

The companies are engaged constructively with the antitrust watchdog to achieve a resolution and have made a timing commitment to the bureau to allow its investigation to continue and advance discussions, Russel added. But the development means the transaction is unlikely to close this quarter as previously expected.

Russel is acquiring five units in western Canada and two in the US Northeast from Samuel for around CA$225 million (US$163 million, €153 million), subject to closing working capital and other normal course adjustments. Both companies handle carbon and stainless steel, aluminum, copper and copper alloys, as well as a range of fabricated metal products and related services.

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