China's aluminium foil export remains steady in last three years; export to the US drops YoY on extra tariffs

Aluminium Foil is the 276th most traded product and China remains the top global exporter of aluminium foil exporting foils worth about US$3.4 billion every year. Aluminium foil being one of the most exported product by China, we would analyse if the exports were impacted by the import tariffs and anti-dumping investigations initiated by the US.

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China’s aluminium semi-finished products (“semis”) were partially hit by the fact that imports from the largest supplier to the U.S. market in the previous three years almost halved in 2018. Tariffs undoubtedly played a part in the drop, but product-specific anti-dumping duties and a saturation of supply-chain dependence between the US and China was also another driver. US tariffs actually diverted the foil export from China to other destinations in Asia.  We are comparing the data from last three years and an estimated export of 2019 to have an understanding of the trend.

In 2016, China’s aluminium foil export world-wide stood at 963,447 tonnes and the export revenue stood at 2.7 billion.  In the year 2017, the volume dropped slightly to 930,279 tonnes of aluminium foil but the revenue from export stood at 2.7 billion due to higher aluminium prices.  The volume again rose in in 2018 and China exported 969,787 tonnes of aluminium foil in in total. The revenue from export stood at US$3 billion. It shows that in the year 2018, the exports of aluminium foil were not much affected by the tariffs that were imposed in March 2018.

But when we look at China’s aluminium foil export to the US, we see a continuous drop year on year since 2016. While in 2016, the volume stood at 175,000 tonnes, the volume dropped to 157,000 tonnes in 2017. In the year 2018, the volume dropped to a meagre 64,000 tonnes and in 2019, the volume is expected to drop further to 33,000 tonnes.

In the year 2019, total exports of aluminium foil by China is also expected to drop to about 788,053 tonnes and revenue is estimated to stand at about 2.6 billion due to the anti-dumping and countervailing duties imposed by the U.S. on Chinese made aluminium foils.  However, China is likely to divert most of its foil exports to other south Asian countries and India unless they impose anti-dumping duties on Chinese aluminium foils.