Alcoa Demands Joint Industry Efforts to Counter Aluminum Overcapacity Threat

SEATTLE (Scrap Monster): Roy Harvey, Chief Executive Officer, Alcoa Corporation has warned of Chinese overcapacity in aluminum sector. The excess capacity in the country has turned out to be a genuine concern for the worldwide aluminum industry, he said in a recent interview.

The huge subsidies granted by Chinese administration have led to spiked up production of aluminum in the country. This has resulted in unprecedented rise in output and increased dumping into global markets. The high U.S. tariffs alone have not been successful in curbing the flow of Chinese aluminum products. Incidentally, aluminum prices registered sharp decline of approximately 20% in 2018.

Although China has been instrumental on cutting inefficient aluminum production, there has been a surge in new primary aluminum production facilities across the country, thereby threatening the viability of aluminum producers elsewhere in the world. The ongoing robust demand for aluminum products from various industries including automotive, aerospace and building has only boosted domestic aluminum production in the country. It is being alleged that the domestic aluminum producers are heavily subsidized by the Chinese administration.

Meantime, Alcoa will continue its efforts to rally the governments and industry associations in affected countries to counter the issue. A joint action will help bring in more balance to the distorted market and create a more level-playing field, it said.