Source: Nonferrous Metal Mesh

Recently, we have been concerned about reports from foreign media about Chinese enterprises exporting large quantities of aluminium to Mexico and then transiting to the United States. This report has no new content compared with similar reports a year ago (at that time, there were also foreign media allegations that Chinese enterprises exported large quantities of aluminium to Mexico and transferred to the United States). At this time, we have reason to believe that this is the United States on September 29 this year. The 332 hearings held by the International Trade Commission (USITC) generated public opinion. We believe that the data and opinions cited in the report are seriously divorced from the facts and confused. It is necessary to make relevant responses here to clarify the facts.

Reported that two years ago, someone flew to see the Mexican desert hoarding nearly 1 million tons of aluminum. We doubt the seriousness of this statement. First of all, is it raw aluminium (electrolytic aluminium) or aluminium fabricated materials observed by plane? Secondly, how accurate is it to judge the quantity of goods on the ground by aerial overlook?

If we see raw aluminium, then the possibility of this shipment coming from China is very low, because China imposes a 15% tariff on the export of raw aluminium. It is not profitable for Chinese enterprises to export raw aluminium, let alone export to Mexico before re-export to the United States.

If you see aluminium processing materials, and indeed aluminium processing materials from China, according to the World Customs Organization (WCO) classification principle, the export declaration of aluminium materials is neither against the laws of the exporting country (China) nor against the laws of the importing country.

We don't know whether the allegation made by the American Aluminum Extrusion Association in this report is that China exports aluminium to Mexico and then exports it directly to the United States, or whether it melts into aluminium alloy rods and exports them to the United States. But in either case, their statements lack basic professional thinking and business logic.

If Chinese aluminium exports to Mexico are directly transshipped to the United States, it is impossible for the goods to obtain Mexico's certificate of origin from the legal point of view. Therefore, even if they enter Mexico first and then the United States, they still have to pay "double-anti" tariffs (from 2010 to now, the United States imposes high anti-dumping and countervailing duties on Chinese aluminium enterprises). As reported, it is impossible for Chinese companies to try to circumvent U.S. taxes by bypassing Mexico.

More importantly, from 2001 to 2015, Mexico exported only 291,000 tons of aluminium to the United States in the whole 15 years (USITC data). If Chinese companies do hoard nearly a million tons of aluminium in Mexico, it will take decades to digest those stocks at the rate that they exported to the United States in the past. This also proves that there is no circumstance for Chinese enterprises to evade "double-negative" tax by means of trans-shipment trade.

Meanwhile, American aluminium alloy imports mainly come from Canada, Russia and the Middle East, and less from Mexico. Between 2001 and 2015, Mexico exported only 307,000 tons of aluminium alloy to the United States; even in the highest year of exports, Mexico exported 49,000 tons of aluminium alloy in 2012, accounting for only 3.1% of the total U.S. aluminium alloy imports in that year (USITC data). The US-Mexico bilateral trade data also prove the untrustworthiness of the claim of remelting exports.

In addition, the judgment that there are nearly one million tons of aluminium hidden in the Mexican desert is not only extremely imprecise, but also makes people doubt the impure motives of its remarks.

According to China's customs data, from 2001 to 2015, China exported 1.07 million tons of all aluminium materials (including aluminium bar, aluminium profile, aluminium foil, aluminium strip, aluminium tube, etc.) to Mexico, including a total of 8043,000 tons of aluminium bar and aluminium profile, which is the total of aluminium materials exported to Mexico by all Chinese enterprises in the past 15 years. According to the report, it seems that all the aluminium materials exported to Mexico from China are neither used locally nor processed by melting. Only when they are stored in the desert can they reach nearly 1 million tons mentioned in the report.

The article also mentions that China has exported a large number of aluminium products to the United States due to the slowdown of domestic demand. Not to mention that, China has been the fastest growing consumer of aluminium in the world in the past decade. Over the past five years, China's efforts and achievements in expanding domestic aluminium applications (especially in transportation and construction) have been evident in the global aluminium industry. In the case of a significant slowdown in global aluminium consumption growth in 2015, China's aluminium consumption still maintained a growth rate of about 8%, while the growth rate of aluminium consumption in the market other than China in that year was only 1.5%. In fact, in the past ten years, China's annual net export of aluminium accounted for less than 10% of the total aluminium, most of which were digested by the domestic market.

At the same time, China's aluminium exports to the United States account for a small proportion of China's total exports. According to the statistics of China Customs, the figures from 2013 to 2015 are 10.1%, 11.5% and 11.7% respectively. At the same time, China imports aluminium from the United States. From 2013 to 2015, China's imports of aluminium from the United States accounted for 7.1%, 6.2% and 7.0% of China's total imports of aluminium. In the context of globalization, there is mutual entry and exit, which is the result of the division of world production capacity and complementary product structure, and should not be unilaterally interpreted as "dumping".

The China Association of Non-ferrous Metal Processing Industries solemnly declares that China's aluminium processing industry opposes both unfair competition and trade frictions on any pretext. We are indignant at the lack of evidence and distorted facts, and criticize Chinese enterprises only on the basis of subjective imagination. Objectivity and justice.

Note 1:332 refers to Article 332 of the United States Customs Law of 1930. The article stipulates that USITC may conduct "routine fact-finding" and report on any incident involving tariffs and trade, including the competitive situation between the United States and other industries. Historically, the "332 clause" investigation has often been a "harbinger" of the future initiation of trade remedies such as anti-dumping, countervailing and safeguard measures in the United States.

Note 2: The data of China market are from Antaike, foreign data Antaike Comprehensive CRU and other analysis institutions.