Century’s Bless Presses On in Defense of Domestic Aluminium Industry
05 August 2016 by Staff
Century Aluminum’s CEO Michael Bless has been on a mission to combat what he (and many other experts) believes is the unfair manipulation of the global aluminium market by the People’s Republic of China. His fight, and plight, was detailed in an article by Bloomberg this week.
Although he has had difficulty gaining traction, he remains steadfast. Pointing out the significant subsidies China grants its aluminium industry in violation of World Trade Organization rules, Bless beckons President Obama (and his successor, whomever that may be) to go to bat for American aluminium in the same way the United States government did for domestic steel makers.
As domestic payroll drops while China’s output grows, time is clearly of the essence, according to Bless. “Something has to give,” he says. “If we wait another year, there may be nothing left to talk about.”
Century and Alcoa are the last two American smelters still in the game, but they face a serious threat from the Middle Kingdom. China expects to increase output by nine percent over the next three years, gobbling up even more of the 55% share of the global market it has now. And with a glut in aluminium, already low prices threaten to fall even lower, which could be lethal – according to experts, if the price per ton drops below US$1,528, the remaining smelters’ days could be numbered.
The U.S. government was quick to take up steel’s case, but aluminium has yet to show up on its radar. One obvious reason – steel production employs forty times more workers in the States than does aluminium production. However, the loss of aluminium production could ax over 100,000 jobs for people in sectors that depend upon aluminium, according to Bless. And, per CRU, the jobs would be mostly in rural areas, which would take a significant toll on already struggling local industry.
Bless also points out that production of high-quality aluminium is a national security issue. Century’s Hawesville smelter is one of only two plants that make high-purity aluminium needed for national defense applications. The other plant is in Dubai.
For its part, Alcoa’s head has placed much of the blame for the current market situation on fake aluminium semis, which are semi-fabricated aluminium parts that are re-melted and sold as raw aluminium, avoiding export taxes and controls and reaping VAT rebates.
But Bless’ focus is upon unfair concessions on taxes and power costs given the industry by their government. He has oral commitments from both the Republican and Democratic presidential contenders that they will act to protect domestic aluminium. Until then, Bless has an uphill battle to fight, as the domestic aluminium industry continues to remain competitive in the face of a foe that Bless contends is playing with a radically different set of rules.