Chinese extrusion capacity continues to increase, North
American extruders must protect U.S. import duties and be
watchful of attemptslegal or otherwiseto get around
them, extrusion industry players said.
Demand for aluminum
extrusions by Chinas construction market alone is
expected to total nearly 10 million tonnes this year compared
with 892,000 tonnes in North America, according to Michael
Southwood, senior consultant at London-based CRU Group. But
despite strong domestic consumption, Chinese extrusion
production continues to outweigh demand, with surpluses
expected in 2014 and for five years beyond, he said.
"Demand is just not
going to be robust enough to keep up with that production,
which is going to keep increasing. ... So where is all that
going to end up?" Southwood asked attendees at the Aluminum
Extruders Council (AEC) Management Conference in Chicago.
officials and aluminum extrusion executives all voiced concerns
about imports from China.
Even though tariffs
are in place to protect North American extruders from unfair
competition from Chinese shipments, Chinese extruders continue
to find ways into North American markets, generally in the form
of components, Southwood said. Prefabricated refrigerated
trailers imported from China, for example, rely heavily on
aluminum extrusions, with each trailer sold in North America
displacing about 3,000 pounds of extrusions that could have
been made domestically.
The U.S. International
Trade Commission ruled in 2011 that dumped and subsidized
imports of aluminum extrusions from China were causing injury
to the domestic industry (
amm.com, April 28, 2011), and duties were
implemented soon after. But the scope of those duties has since
been challenged (
amm.com, Nov. 28).
Former AEC chairman
and retired Bonnell Aluminum Inc. president Duncan Crowdis
calculated that the 10 million tonnes in Chinese construction
demand for extrusions equates to about 1,350 8-inch presses
running full out. "There is a little bit of a sign about
whats to come," he said.
executives and AEC officials stressed that more needs to be
done to protect the scope of the import duties and to combat
attempts to circumvent them. But the cost to the AEC to wage
that battle has proven expensive and time consuming, they
"The amount of
volunteer labor ... and the attorneys fees have been
unbelievable. Its $1.2 million per year for us to defend
what were doing," Thomas J. Schabel, chief executive
officer of Alexandria, Minn.-based Alexandria Industries, said
during a "fair trade" reception. The AEC continues to ask
members to help pay for those costs, he said.
The scope of the U.S.
import duties is wide, so the extrusion industry must be
vigilant against any exclusions, Schabel said. "If we let one
to four of those go through its precedent setting, and
all of a sudden we lose 20 to 30 percent of the effectiveness
of the tariffs. We cannot turn our back as an industry."
The North American
extrusion market was "absolutely under assault" from low-cost
imports from China before the duties were put in place, AEC
president Rand Baldwin said. U.S. and Canadian extruders have
seen their opportunities expand significantly thanks to those
duties, he said.
But the aluminum
extrusion sector, like other industries, has found that tariff
orders are only the beginning of the fight, and extruders must
continue to push back against legal challenges, appeals, waiver
requests and illicit challenges such as circumvention, Baldwin
"Our market was facing
an existential life-or-death threat. We acted. Were
alive," he said. "But we need to continue (to act)."