The European Aluminium announced the need for additional instruments to address harmful effects of Chinese subsidies.
The group urged the European Commission to effectively address the distortive effects of Chinese subsidies in the European Union (EU) single market.
According to the Brussels-based organisation, the aggressive approach of global powers like China need to be addressed with a feasible measure for the EU to level the playing fields, facilitate supply chain diversification and reinforce their defenses against unfair metal trade practices.
The Director General of European Aluminium, Gerd Götz, said, “The European aluminium industry is under pressure from unfairly subsidised Chinese aluminium leading to excess capacity and a growing influx of under-priced Chinese exports. The exports have a high carbon footprint, threatening the competitiveness of European producers and Europe’s sustainability ambitions.”
According to Götz, the EU needs to “dedicate ample resources at the beginning of 2021, to overcome the unfair trade”. The aluminium industry cannot wait any longer, he said.
A report by the Organisation of Economic Cooperation and Development report titled “Measuring distortions in international markets: The aluminium value chain”, highlights how the non-market participants were responsible for some of the recent increases in aluminium smelting capacity, with damaging impacts throughout the value chain.
The report indicates that global aluminium companies have received up to $70bn in different forms of support over the 2013-2017 period, with 85pc of the documented subsidies going to just five Chinese firms.
Currently, China produces 57pc of worldwide primary aluminium compared to only 11pc in 2004. Chinese companies are supplying the European market at decreased prices and have acquired EU aluminium producers.
The COVID-19 crisis has forced the EU to strengthen their strategic approach towards unfair trade policies and practices.
“Global competition, especially from China, will ramp-up in the post-COVID-19 world. The Chinese aluminium industry has already built up massive volumes and is capable of replacing the European aluminium industry if the EU does not act assertively,” Götz said.