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02-12-2003

Hulett is not surprised at the preliminary determination by the United States International Trade Commission


Hulett Aluminium, the South African based producer of aluminium rolled products, expressed its disappointment with the determination by the U.S. International Trade Commission to continue the antidumping investigation against its exports of series 6000 aluminium plate to the United States filed by Alcoa, Inc. Hulett believes that the case is without merit and continues to submit evidence in this regard.

Peter Staude, Chairman of Hulett Aluminium, said that he was not surprised at the preliminary finding. More than ninety per cent of all anti-dumping cases in the United States are ruled in favour of the complainant at this early stage of the process. The indication of material injury to the U.S. industry by reason of imports of series 6000 aluminium plate from South Africa is outrageous. The case was brought by a single member of the US industry, Alcoa, which describes itself as "the world's leading producer of primary aluminium, fabricated aluminium, and alumina." Alcoa's representative testified at the ITC staff conference that "Alcoa as a whole is a healthy and prosperous company. In fact, last month Alcoa reported a substantial increase in overall earnings for the third quarter of 2003."

Despite its healthy condition, and pre-eminent position in the US and global aluminium industry, Alcoa targeted a trade action against an extremely narrow category of aluminium plate products which constitutes less than 1% of the total United States market for rolled products. Alcoa has only targeted Hulett Aluminium which is one of many foreign producers that export this product to the United States. In so doing, Alcoa ignored both the substantial volumes of lower priced imports from other countries, notably Russia and China, as well as the broader range of aluminium plate and sheet products produced by the US industry. 

Alcoa's petition is based on an erroneous understanding of several critical facts. For example, Alcoa has asserted that Hulett sells significant tonnages of a comparable plate product in South Africa and that Hulett is continuing to grow its exports of series 6000 plate to the United States.

Hulett continues to co-operate fully and provide all information necessary for the U.S. authorities who are investigating Alcoa's allegations. Hulett Aluminium remains optimistic that the ongoing investigation will find that Hulett has not engaged in any injurious unfair trade practice through sales of its series 6000 aluminium plate to the United States. 

Peter Staude commented further that in Asia Hulett Aluminium continues to encounter stiff competition in the cited product from Alcoa out of Italy at prices significantly below those ruling in Europe and the United States. 

FACT SHEET

Hulett Aluminium is presenting information which shows that the U.S. industry is not materially injured by reason of unfairly traded imports of series 6000 aluminium plate from South Africa. This information includes the following:

On the matter of causality, Hulett is presenting data which shows that the subject imports are not significant when compared to the volume of shipments by the U.S. industry producing aluminium plate or to shipments by the U.S. industry producing aluminium plate and sheet. Thus, imports from South Africa have not caused material injury to the U.S. industry.

The broader economic climate prevailing in the USA and a generally acknowledged recession in manufacturing over the period of investigation, and specifically the depressed aerospace and semiconductor equipment markets, two key end-use applications for heat treated plate, were the key factors that placed downward pressure on prices in the heat treat plate sector.

It is noteworthy that Alcoa have made no mention of significant additional heat treat plate capacity which it has recently brought on stream as being a factor influencing its current economic condition. Nor did Alcoa mention any impact of subject imports when it announced in 2001 its plans to increase its heat-treatable plate capacity through a $90 million expansion at its Davenport facility.

While Alcoa complained about "aggressive underselling" by Hulett, it does not complain about substantial tonnages of imports from other sources that are priced significantly lower than imports from Hulett.

Evidence submitted by Hulett reveals that it has neither the capacity to increase production of series 6000 aluminium products, nor the intention to increase exports to the United States. 

Further evidence presented by Hulett shows that subject exports for the last seven calendar quarters have remained steady, demonstrating the absence of any trend toward significantly increasing imports. This contradicts the erroneous allegations by Alcoa that subject imports have increased substantially during the past two years.

In addition, Hulett has provided sales data of its exports of the subject plate to other countries around the world, and based on this recent strong growth trend, it is clear that over the coming years, sales to the USA will decrease, rather than increase.

These facts undermine Alcoa's claims of injury and future threat of injury by imports of series 6000 aluminum plate from South Africa.

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