Trade Bodies Highlight Challenges in the Global Aluminum Trade

SEATTLE (Scrap Monster): A new policymaker briefing was released jointly by the Aluminum Association, European Aluminium, the Aluminium Association of Canada and the Japan Aluminium Association. Titled “Towards Fairer and Cleaner Trade in Aluminum”, the paper outlines the ongoing challenges in the global trade of aluminum.

According to the briefing, massive state subsidies, especially in China, have resulted in distortion of aluminum supply chains and has led to damaging of the environment. Over the past two decades, the Chinese aluminum production has grown from around 10% of the global market to almost 60% today. This growth was mainly driven by massive state subsidies, which are non-compliant with the World Trade Organization (WTO) rules, the paper noted.

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As per studies, Chinese firms are found to have received state support ranging from 4% to 7% of annual revenues, when compared to support of around 0.2% of annual revenues of non-Chinese firms. These subsidies unfairly benefit Chinese production. Also, the above subsidies promote GHG emitting production systems, as almost 88% of the country’s aluminum production relies on carbon-intensive coal-generated electricity.