The Curious Case of the Aluminum Sheet Exports from China — Panjiva


The Curious Case of the Aluminum Sheet Exports from China

China 1793 Materials - Metals/Mining 496 Metals - Aluminum 164 Tariffs 1205 U.S. 3362

The U.S. Commerce Department has “self initiated” anti-dumping and countervailing subsidy cases against Chinese aluminum sheet exports, marking the first time since 1991 that such a strategy has been followed.

The timing is curious given that the administration is currently working on an (effectively self-initiated) section 232 review of the entire aluminum industry. That has been delayed, along with a matching steel case, due to the ongoing tax reform process as outlined in Panjiva research of November 21. It’s probably too early to say, however, that this latest move reflects an expectation that the section 232 review will lack any “interesting” outcomes.

From a targeting perspective the case makes sense. Panjiva data shows that total U.S. imports climbed 18.5% on a year earlier in the 12 months to September 30 in volume terms, and by 16.6% annually for the past three years. Chinese exports to the U.S. climbed 33.9% in the past year. The main losers have been Canadian exporters. However, the peak may already be past, with Chinese exports in the third quarter having fallen 16.2% vs. the second.


Chart segments U.S. imports of aluminum sheet by country of origin.   Source: Panjiva

Notably can-stock has been excluded, possibly to avoid a significantly negative direct on consumers (higher soda and beer costs). Other buyers of the product won’t be as lucky. Commerce Secretary Wilbur Ross has made it clear that beneficiaries of “cheap steel” cannot expect to continue to receive it. On average the Chinese imports’ value per ton in the past year were 12.8% cheaper than that for all imports, and 24.9% cheaper than those from Canada (mix effects aside).


Chart calculates import value per ton based on dollar value of imports across all aluminum sheet products vs. tonnage, segmented by market of origin.   Source: Panjiva

Tariffs, or quotas, applied could be a significant issue for the Chinese manufacturers involved. The U.S. represented 19.0% of total Chinese exports of the broader sheet aluminum products involved over the past two years. Historically though diversions to other Asian markets – particularly Vietnam and India – has been a reaction from manufacturers.


Chart segments Chinese exports of broad aluminum sheet categories by destination market.   Source: Panjiva

PANJIVA RESEARCH is a service provided by Panjiva, Inc. ("Panjiva") to relevant global subscribers, and are deemed to be Panjiva "Services" subject to the Panjiva Terms & Conditions of Use. Information contained within or made available via the Services is for informational purposes only and nothing in the Services shall constitute or be construed as an offering of financial instruments, or as investment advice or recommendations by Panjiva, Inc. or its affiliates of an investment strategy or whether to "buy", "sell" or "hold" an investment. The Services may include views and commentary about customers of Panjiva. No aspect of the Services is based on consideration of your individual circumstances, and you should determine on your own whether you agree with the information contained within or made available via the Services. Employees involved in Panjiva Research may hold positions in securities analyzed or discussed in the Services. Panjiva does not make any express or implied warranties, representations, endorsements or conditions with respect to the Services and the information contained within or made available via the Services, including without limitation, warranties as to the usefulness, completeness, accuracy, currentness, reliability or sufficiency of any information (including, without limitation, conclusions, statements, opinions, estimates, forecasts or projections of any kind) and expressly disclaims any implied warranties. Neither this disclaimer nor any of its contents may be forwarded or redistributed without the prior written consent of Panjiva. © 2019 Panjiva, Inc. All Rights Reserved.