How Chinese Enterprises Deal with the Trade Friction between Steel and Aluminum

In recent years, the steel trade has become the hardest hit area for Sino-U.S. trade friction. Before the United States investigated steel 232, dozens of anti-dumping and anti-subsidy measures have been taken against dozens of products（5754H22 aluminum plate）, covering almost all major categories of steel products, and the high tax rate is close to prohibitive tariffs. In order to resolutely safeguard the stability of the Chinese market, the interests and rights of Chinese steel companies are safeguarded. Representatives of various companies expressed different opinions:
Chonghong Investment Director and Macroeconomic Strategy Director Fu Peng stated at the “2018th 13th Copper-Alium Summit” that “in the United States, we need to reshape the global trade supply chain, redistribute interests, and increase the US’s own demand expansion. The substitution of external demand, while increasing the proportion of domestic demand."

Mo Xinda, Director of the Light Metals Division of the China Nonferrous Metals Industry Association, said that at present, China has more than 200 countries exported worldwide, and the number of exports to the United States accounts for 16% of the total exports. The United States has a large consumer market, the market has a relatively high degree of credit, a variety of product structures, and rapid self-transformation. Multiple factors have led to greater demand for foreign aluminum products（3003 aluminum coil on sale）. From a large perspective, before the current trade frictions, Chinese and American entrepreneurs have a good international division of labor and cooperation. However, this situation is being forced to break.

For Chinese companies, Mo Xinda believes that it is necessary to strengthen self-regulation and increase import prices first. In addition, strengthen early warning and try to contact the downstream of the United States in order to get news in advance. Adjust the investment model, and optimize the layout of the industrial chain through mergers and reorganizations when the value of the company is located in the land. We must actively respond to such measures as lobbying, hearings, and group warming, and adopt reciprocal restrictions to curb the spread of trade frictions.

Mo Xinda emphasized that "From the point of view of international distribution, if there is no US-European market, there are other supplements, such as through our investment and economic and trade cooperation with other countries, it will further stimulate consumption."

According to Wen Jun, vice president of the China Nonferrous Metals Industry Association, “China's aluminum industry development strategy should be studied. Based on the strict control of electrolytic aluminum production capacity（8011 aluminum foil on sale）, the industrial structure and product structure of China Aluminum Industry will be continuously adjusted to expand effective supply. The international trade friction will continue to expand and normalize. It will be necessary to consider the domestic industrial development and the layout of overseas production capacity and to formulate domestic industrial policies and international trade policies that are compatible with it. It is of great importance to cultivate a professional team that deals with international trade friction.

The literature army also stated that it is necessary to speed up the development of overseas aluminum resources and complete the overseas bauxite and alumina production capacity layout in 5 to 10 years. The overseas equity production capacity will reach 30 to 40% respectively. At the same time, it will take precautions to strictly control the new production capacity of domestic alumina, leaving a gap in the domestic supply of alumina, and the gap size will be adapted to the overseas alumina equity production capacity. Electrolytic aluminum to meet the domestic demand-based, strict control strict control of electrolytic aluminum production capacity, timely adjustment of electrolytic aluminum import and export policies. We must also strengthen basic research on new aluminum alloy materials and new product development, actively promote supply-side structural reforms, expand effective supply, and actively develop markets in South Asia and Southeast Asia. To improve the grade of recycled aluminum products, we must continuously improve the environmental indicators of the recycled aluminum production process, and promote clean production with a combination of electrolytic aluminum and recycled aluminum.