Aluminum Association Calls for Joint Efforts to Address Global Overcapacity

SEATTLE (Scrap Monster): The Aluminum Association in association with trade associations representing various countries has released a joint letter, calling G20 leaders for a global forum on aluminum excess capacity. The signatories of the letter include representatives from Aluminium Association of Brazil, Aluminium Association of Canada, European Aluminium and Japan Aluminium Association.

The letter cited the unity among G20 leaders to reach a consensus during the recent summit held in Hamburg, Germany, which had resulted in publication of the report on Global Forum on Steel Excess Capacity. It urged the leaders to apply the same framework to create a global forum on excess capacity woes associated with global aluminum industry. The formation of such a global forum is expected to result in coordinated efforts to tackle persistent issues faced by aluminum sector, the letter noted.

The associations raised serious concerns over the unsustainable and steady increase of overcapacity in the primary as well as secondary aluminum sectors in many countries, especially in China. Despite moves to curtail illegal and subsidized production by Chinese authorities, the country has recorded 13.3% jump in production, as compared with 2% rise in production in the rest of the world. Studies indicate that primary capacity continued to record year-on-year growth in China during the previous year.

Although, unilateral trade measures by individual countries may help to curtail unfair trade practices, a collective action is required to bring about a sweeping change. The proposed Global Forum could be the first step in this direction, which in turn could help in creation of adequate level-playing field in the global aluminum market. The forum should play a creative role in developing trust among parties by identifying and eliminating harmful policies that lead to distortion of market.

The letter calls upon G20 to take appropriate action to launch the forum during its 2018 summit to be held in Buenos Aires, Argentina.