Chinese aluminum smelters call for AD measures

Platts quoted state run nonferrous metals information provider Beijing Antaike Development as saying that 20 Chinese aluminum processing plants are urging the Chinese government to implement antidumping measures against overseas' aluminum product imports.

An aluminum analyst with Antaike said EU, Canada and India have taken anti-dumping measures against Chinese aluminum products which we think are unfair to China. Other countries, for instance have also exported aluminum products to EU, but they enjoy preferential tax treatment. He said that China has already joined the World Trade Organization. Overseas antidumping measures on Chinese aluminum products are against WTO's free trade principle.

Industry insiders in China said that the Chinese authorities concerned are still discussing ways of protecting the Chinese domestic aluminum processing sector, including starting an antidumping probe into overseas aluminum products, restoring the export tax rebates for China-made aluminum products and imposing import tax on refined aluminum imports.

According to local news reports, the Chinese government lowered the locally-produced aluminum extrusion export tax rebate to zero in mid-2008 from a previous level of 13%. Chinese aluminum extrusion producers' production costs rose by CNY 2,000 per tonne thus lowering domestic aluminum extrusion producers' profits.

The Antaike analyst said ¡°Much has been talked about the state planning to impose an import tax on imported refined aluminum this year to control the influx of imports. But as we expect the import volume to slow down in the next few months it seems unlikely that the state would do so in the near term.¡±

Chinese customs figures show that China imported 703,545 tonnes refined aluminum and aluminum products during the first four months of this year up by 118.5%YoY.

The influx of aluminum imports over the past few months, fuelled by the price arbitrage between Chinese domestic aluminum prices and those on the LME, has pressured down Chinese local aluminum prices. Chinese domestic refined aluminum price were at Yuan 12,825 per tonne on May 21st down by CNY 25 from May 20th. The average monthly price in April was higher at CNY 13,799 per tonne. Meanwhile in Guangdong Province, an official with major Chinese aluminum extruder Asia Aluminum said that financial turmoil had adversely affected its export business and said that a move by the state to restore the tax rebate would 'help.'

According to the company official Asia Aluminum has an aluminum extrusion capacity of 360,000 tonne per year, but its actual output this year is expected to be only 160,000 tonne down from 200,000 tonnes in 2008 'on lack of orders on the poor economic conditions.

In northern China's Liaoning Province, a source with aluminum extruder Zhongwang Group said that although the company's export business has not been affected much by the poor economic conditions this year due to a stable overseas client base, they 'wished that the state could protect the local aluminum processing sector by taking antidumping action on overseas' aluminum product imports and restoring the export tax rebate for China made aluminum products.'

Customs figures showed China exported 42,857 tonnes unwrought aluminum during the first four months of this year down by 81%YoY from the same period last year.

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