Leading Aluminum Trade Bodies Urge Immediate G7 Action on Global Overcapacity

SEATTLE (Scrap Monster): The leaders of aluminum associations of the U.S., Canada, Japan and the Europe have urged G7 leaders to take immediate action on market distorting behaviors highlighted by the recently published OECD report.

In a joint letter written to the U.S., EU, Canadian and Japanese G7 leaders, the Aluminum Association, the Aluminum Association of Canada, European Aluminum and the Japan Aluminum Association demanded immediate action on several factors that undermine the growth of global aluminum industry including unfairly subsidized overcapacity and other market-distorting behaviors.

The OECD report titled “Measuring distortions in international markets: The aluminum value chain” had highlighted how non-market forces and government support appear to explain some of the recent increases in aluminum smelting capacities. Though government support could be visible throughout the entire aluminum value chain, it is most prominent in China and GCC countries. The report cited market distortions as a genuine concern for the global aluminum industry.

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The report had revealed that 17 international companies had received up to $70 billion in different forms of support over the 2013-’17 period. Out of this, nearly 85% of the documented subsidies went to five Chinese firms.

The Associations reiterated their call for global political leadership to take the lead for focused and decisive action in setting up new, effective rules on subsidies and the role played by state owned enterprises.