Short Supply of Metal is Impacting U.S. Aluminum Extruders
AEC calls on Washington D.C. policymakers to help find a solution
April 18, 2018; Wauconda, Illinois – In recent weeks the members of the Aluminum Extruders Council (AEC) have seen unprecedented disruption to the primary aluminum supply chain. Last month, the Trump Administration announced 10% tariffs on all primary aluminum products imported into the United States as a result of the Department of Commerce’s 232 Investigation into the national security impacts from such imports. Significant shifts in both pricing and supply began to take hold across the industry. Extruders began to find ways to source metal not covered by these orders, and the London Metal Exchange and Midwest Premium both seemed to swing widely each week as the industry watched the orders take hold of the market.
Just when things seemed to settle a bit, sanctions against the Russian oligarchy were announced. Consequently, the second largest supplier of primary aluminum was forced to stop deliveries into the U.S. market. Without any advance notice, without any time to re-establish new suppliers, without any chance to properly react, extruders across the U.S. found they were running out of aluminum raw material, and no alternatives to obtain any. Work stoppages have now been reported across the country. Some extruders only have enough aluminum raw material to run for a few more weeks. This all comes as the industry enters its busiest time of the year with the market having set bookings records in the first quarter.
These back-to-back blows to the industry are alarming and need to be addressed. Aluminum extruders need metal as their core raw material, and the surety of supply, in order to calm the nerves of manufacturers dependent upon extrusions to make their products. Extruders have exposures to their customers regarding work stoppages, and recent policy decisions in Washington D.C. have left them helpless. Meanwhile, extrusion buyers are making every effort they can to find the supply they need to survive. This includes going overseas to find product they can import to the determinant of the domestic industry. This is the exact opposite result of what the Administration had in mind.
It is important that policymakers in our country’s Capitol find a solution to this self-inflicted wound. No one in the U.S. aluminum extrusion industry has sympathy for the Russian oligarchy, and it’s simply not an issue they have the standing to address. However, there must be a way to address that concern without destabilizing the domestic industry.
The AEC stands ready to help create such a solution for our industry. As a first step, we ask the Administration to exclude from duties and sanctions all countries from which the domestic extrusion industry can import primary aluminum until there is a guarantee of a solid domestic supply option. Now, more than ever, the industry needs surety of supply. Without any solution, the impact to the aluminum extrusion industry is too devastating to comprehend.
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The AEC has led the U.S. aluminum extrusion industry in achieving level competition by winning tariff protection that offsets unfair trade practices of extruders/importers of aluminum profiles produced in China. The efforts have been of enormous value to domestic extruders and suppliers. They may have saved the industry. Conservatively, AEC estimates 800 million pounds per year of extrusions are being produced in the U.S. that would have otherwise been lost to China. For more information, visit www.AECFairTrade.org.
The Aluminum Extruders Council (AEC), established in 1950, is an international association dedicated to advancing the effective use of aluminum extrusion in North America. AEC is committed to bringing comprehensive information about extrusion's characteristics, applications, environmental benefits, design and technology to users, product designers, engineers and the academic community. Further, AEC is focused on enhancing the ability of its members to meet the emerging demands of the market through sharing knowledge and best practices. Advocacy programs ensure that aluminum extruders, suppliers and their products remain relevant and viable in an ever-changing legislative and regulatory climate. More than 120 member companies represent primary aluminum producers and other industry suppliers in addition to aluminum extruders operating hundreds of extrusion presses in hundreds of plants worldwide. For more information, visit the website at www.aec.org; contact AEC at email@example.com.