China denies aluminium exports evading U.S. duties

SHANGHAI (Reuters) - A Chinese industry group has denied that the country’s aluminium producers could be involved in exporting extrusion products via Mexico to circumvent U.S. duties, in the latest sign of bubbling trade tensions between the two nations.

A report by the Wall Street Journal last week cited U.S aluminium executives contending that some $2 billion worth of Chinese metal products had been stockpiled in Mexico as part of a scheme to re-export to the United States, which imposes heavy duties on Chinese products.

The newspaper said a total of 1 million tonnes of aluminium products were previously spotted by a pilot commissioned by a U.S. aluminium executive to fly over a factory in Mexico.

The China Non-ferrous Metals Fabrication Industrial Association said in its newspaper that it was impossible to identify the amount stockpiled from a plane and that U.S. duty of 15 percent made it impossible for Chinese producers to export primary aluminium to the country.

“China’s aluminium processing industry opposes unfair competition and trade disputes triggered by any excuse. We are outraged by the condemnation of Chinese firms that lacks foundation and is based on distorted facts and subjective imagination,” it said.

The association said that if the extrusion products were from China it would not be possible to change their origin to Mexico.

Mexico exported 291,000 tonnes of aluminium products to the United States between 2001-2015 and the association said “it would take several decades to ship 1 million tonnes of stocks to the U.S.”

China’s customs data showed that China exported 1.07 million tonnes of aluminium products including bars, sections and strips to Mexico between 2001 and 2015.

Extrusion is the process of shaping aluminium by forcing it to flow through an opening in a mould to make products for use in industries ranging from electronics to aerospace.

U.S. upstream smelters and downstream extruders have both argued that subsidized Chinese aluminium production has depressed global prices and represented unfair competition.

The U.S. Department of Commerce is investigating China Zhongwang after the U.S. Aluminium Extruders Council alleged that the company evaded U.S. import tariffs on aluminium extrusions.

Reporting by Ruby Lian and Josephine Mason; Editing by Ed Davies