The Use of Aluminum Composite Panels in High Buildings Raises Safety Concerns for Firefighters | Aluminum U Channel

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NEW YORK — U.S. aluminum extruders are growing concerned over a massive stockpile of aluminum extrusions being stored at a casting facility in Mexico. Aluminicaste Fundición de México S. de RL de CV, a producer of secondary billet, slab and forging billet, is storing around 850,000 tonnes of aluminum extrusions at its San José Iturbide, Mexico, facility, according to two sources familiar with the matter. One source, who spoke on the condition of anonymity, confirmed that the extrusions had been shipped directly from extrusion plants in China and were being remelted into billet at the Mexico facility. "Yes, it’s about 850,000 (tonnes) on the ground," the source told AMM. "The quality of the metal is very good. It’s coming from billets that are extruded in China, shipped to Mexico, and made back into billet. They are currently casting at full capacity, which is about 100,000 (tonnes) per year." The extrusions began arriving about 16 months ago and were delivered via "80 trucks per day" for almost a year, the source said. "It’s a lot of metal. Even me, I have not seen that much metal before," he said. "It was 300,000 (tonnes) about a year ago and quickly grew to 850,000 (tonnes)." U.S. extruders are concerned that prices for domestic billet could see a significant drop if billet produced from the stockpile makes its way to the U.S. market. "This could have a huge impact on domestic prices if this material is somehow sold at below cost in the U.S.," one U.S.-based extruder said. The practice of importing extrusions from China and remelting them into billet is not illegal or known to violate any law. Aerial and ground photos—taken June 13 and obtained exclusively by AMM—show the stockpile, which consists of extruded shapes, likely produced on 10- to 14-inch extrusion presses, with a weight-per-foot ratio of roughly four to 10 pounds per foot. The shapes also appear to be uniformly cut to the same length and arranged in similar size bundles, with dunnage for strapping made from extruded aluminum rather than wooden blocks. A recent chemical analysis, done by a manufacturing source with ties to Aluminicaste, confirmed that the extrusions were made mostly from commercially pure aluminum. "We found that most of the shapes contained about 0.30 (percent) magnesium, 0.35 (percent) silicon and 0.10 (percent) iron," the manufacturing source told AMM, adding that he believed the material was being exported as "a finished product to get it out of China and somehow it’s being brought into Mexico labeled as scrap with the intention of it being remelted and eventually shipped into the U.S." The source material for the billet was almost exclusively scrap, Aluminicaste North American sales director Neil Johnson told AMM. "We’ve been producing and we’re actively marketing the billet into the U.S.," he said. However, pictures show a large quantity of finished extruded product at the facility. "The billet we produce in Mexico is made from global scrap—aluminum press scrap," Johnson said, adding that most of the material had come from factories in China. "Currently, we’re working on some logistics issues in terms of getting it (billet) into the U.S., using both rail and truck." The Aluminicaste website does not provide details of the company’s ownership structure. However, Aluminicaste president and chief executive officer Z.P. Liu also is president and chief executive officer of China Zhongwang Holdings Ltd., the second-largest industrial aluminium extrusion product developer and manufacturer in the world. A source familiar with the matter confirmed that Liu is the owner of both companies. Zhongwang Holdings is seeking approval for a $1.5-billion extrusion plant in Barstow, Calif. (amm.com, June 16). Aluminicaste had been "very successful in providing supply for our Mexican, Central and South American extruder partners in our first year of operation. We have the additional capacity after our ramp-up year to look north into the U.S.," Liu had said in an April 30 statement. But market participants are unclear why extruded shapes from China would be remelted back into billet in Mexico, largely because that type of manufacturing process is generally considered to be entirely cost-prohibitive. "What this whole thing says to me is that they (Zhongwang) are casting commercially pure aluminum into billet, turning it into an extruded shape and shipping it out of the country as an extrusion," one U.S.-based extruder told AMM. A second extrusion source said that the material is likely being shipped out of China as 6063 extrusions. "It allows Zhongwang to capture an 11-percent rebate from the Chinese government," he said. "But that rebate is reserved for extrusions destined to become a product, not remelted into billet. If that is in fact the case, the big question becomes what Zhongwang charges Aluminicaste for the extrusions since Zhongwang is essentially selling the material to itself." Zhongwang and several U.S.-based business partners of Liu did not respond to numerous requests for comment regarding the rebate. The U.S. Commerce Department’s anti-dumping and countervailing duty orders on Chinese-origin aluminum extrusions are 33 percent and 10.6 percent, respectively, of the declared value of the imported aluminum. The duties apply to 1000-series, 3000-series and 6000-series aluminum alloy extrusions.

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