Photo by Scott Webb
Western aluminium groups have urged leaders of G7 countries, ahead of the meeting next month in Biarritz, France to curb state subsidies that the industry considers to distort global trade and fuel overcapacity.
“We are calling on the G7 to take the lead for focused and decisive action ... to begin the process of setting new, more effective rules on subsidies and SOEs (state-owned enterprises) to put an end to such distortive practices,” the groups said.
The statement by aluminium associations from the US, Europe, Japan and Canada came ahead of a summit of the G7 group of rich nations in France on August 24-26.
It cited a study by the Organisation for Economic Cooperation and Development (OECD) this year that said 17 international aluminium companies received up to $70-billion (€63-billion) in state support during 2013-2017, with 85% of the support going to five Chinese firms.
China is the world’s biggest aluminium producer, accounting for 57% of global primary output of 64.3 million tonnes in 2018.
“Time is running short as aluminium producers are under stronger pressure than ever. What we need now is a solution that is designed for the aluminium sector to ensure a sound future for all stakeholders,” the statement said.
Benchmark aluminium prices on the London Metal Exchange CMAL3 have dropped 35% since peaking in May 2011 as the market grappled with high inventories and overproduction.
The G7 group includes the United States, France, UK, Japan, Germany, Italy, Canada as well as the European Union.
Some of the world’s biggest aluminium companies include Chinese firms Hongqiao and Aluminum Corp of China Ltd, Russia’s Rusal and Canada's Rio Tinto Alcan.
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