Aluminum associations of US, EU, Canada, & Japan outline roadmap for action on aluminum overcapacity
Monday, June 4, 2018
Posted by: Nancy Molenda
The national aluminum associations’ leaders from Canada, the United States, Europe and Japan today held a meeting with industry executives and government representatives from the G7 member countries to discuss a roadmap for governmental multilateral action on global aluminum overcapacity.
Global demand for aluminum is growing and will require commensurate growth in primary smelter production, recycling and semi-fabricated aluminum products. However, subsidized overcapacity and other market-distorting behavior are undermining the sustainable growth of the global aluminum industry for both primary and downstream aluminum producers.
A news release from The Aluminum Association noted, "It is time for G20 leaders to provide a collective and multilateral response. To initiate such process, the attendees of the Montreal Aluminium Summit defined a Roadmap to a sustainable global aluminum market that will be shared with the G7, and ultimately the G20 countries."
The Roadmap identifies China as a leader in aluminum production, mainly because of substantial governmental intervention. As China grows its overwhelming share of the market by adding new capacity upstream and downstream, enabled by state subsidies and support programs of all forms, it progressively undermines existing privately-owned competition, while inhibiting market-driven expansion outside the country. The ongoing erosion of free and fair trade of aluminum caused by China’s built up overcapacity and unruly market behavior is at stake.
To ensure a sustainable solution to these market fundamentals issues, several criteria were identified to assess the best approach to build remedies: inclusive of whole value chain, protective of fairly produced and traded aluminium, multilateral, multistakeholder, sustainable over the long term, transparent and reliable, actionable, enforceable and verifiable, wide in scope, and empowered and accountable. The clear solution emerging from the Summit is a Global Multilateral and Governmental Forum on Aluminum Overcapacity based on a robust international monitoring system.
"The creation of a global forum will help us to address illegally subsidized Chinese overcapacity, which is challenging aluminum companies across the value chain and around the world," said Heidi Brock, President and CEO of The Aluminum Association. "The roadmap we developed today is an important catalyst for those discussions. The aluminum industry is speaking loudly and with a single voice – now is the time to address the Chinese overcapacity challenge once and for all."
Jean Simard, President and CEO of the Aluminium Association of Canada commented, "For more than a decade, the Canadian aluminium industry has faced an unbalanced market. It is only through international dialogue and cooperation, through the G20 and OECD, that the equilibrium in the aluminium industry will be restored. The conclusions reached today at the Montreal Aluminium Summit is the first step in that direction."
Read the Aluminum Association full release here.