The EU has announced an end to the temporary suspension of anti-dumping duties on rolled aluminium products entering the block.The moratorium was due to expire in July.The news that the UK will impose temporary tariffs for six months follows last week’s announcement that it will launch an anti-dumping investigation into aluminium extrusions imported from China.
The European Commission conducted a similar investigation into Chinese aluminium sheet, sheet, strip and foil products last year.On October 11, they released the results of the survey, which showed that the dumping margin was between 14.3% and 24.6%.Despite the commission’s anti-dumping measures, they suspended the ruling for nine months as the market tightened after the pandemic rebounded.
In March, the EC consulted with the parties concerned to decide whether a further extension of the moratorium was necessary.They concluded that there is sufficient spare capacity in the European market.On average, the utilization rate was found to be about 80%.This has proven to be quite satisfactory for the reintroduced measure.
Which brings us to this week.As mentioned earlier, the European Commission has officially announced that it will re-impose anti-dumping duties after the extension expires on July 12.During the investigation period (July 1, 2019 – June 30, 2020), the EU imported about 170,000 tons of products involved in the case from China.In terms of size, this exceeds the UK’s annual consumption of flat aluminium.
The products involved include coils or tapes, sheets or circular plates with a thickness of 0.2mm-6mm.It also includes aluminum sheets with a thickness of over 6mm, as well as aluminum sheets and coils with a thickness of 0.03mm-0.2mm.That said, the case does not include related aluminum products used to make cans, auto and aircraft parts.This is likely the result of effective consumer lobbying.
The decision comes against the backdrop of soaring aluminum exports from China.The surge was partly due to lower primary prices on the Shanghai Futures Exchange relative to the LME and higher VAT rebates for exporters.China’s domestic aluminium production has also grown due to the easing of energy restrictions and Covid-19 lockdowns, which have slowed consumption.
To be sure, the EU’s move may not alone stop the flow of Chinese metals.However, initial investigations found that setting tariffs at or below the list price range (14-25%) could cause the market to simply pay the cost.This may not apply to standard commercial products.However, for advanced alloys, supplies in Europe remain tight, despite what the EC may think.
For example, when the UK imposed a 35% tariff on Russian material last month, the market basically just paid for it.Of course, the material in question is already in transit, and there are no readily available replacements.Still, this suggests that when a country imposes import duties, it usually doesn’t penalize producers.Instead, it leaves the burden on the importer, or more likely the consumer.
In the long run, tariffs can deter further purchases, assuming the market has sufficient alternative supply options.But while the market remains tight, it could end up driving up the market prices consumers are forced to pay to all suppliers.This includes even those suppliers who are not affected by the tariffs.In their case, they could simply take advantage of scarcity and push prices up just below AD levels.
This is certainly the case in the US under 232.This may be the case in the EU and the UK.That is, until the market softened and the metal became so readily available that suppliers had to fight for business.
Post time: Jun-16-2022