Japan aluminium industry worried about U.S. automobile import tariffs

Nippon Light Metal Holdings

25/07/2018 11:09

* U.S. tariffs on auto may hugely impact on Japanese
industries
    * U.S. duties on aluminium had limited impact on Japan firms
    * Sees key growth opportunity for aluminium in auto sector 

    By Yuka Obayashi
    TOKYO, July 25 (Reuters) - Japan's aluminium industry is
more concerned over possible U.S. import tariffs on automobiles
that could impact a wider range of the country's industries than
the U.S. duties already imposed on the light metal, the head of
a trade body said on Wednesday.
    In May, U.S. President Donald Trump ordered a national
security probe into imports of automobiles. Similar national
security probes were the precursor to the imposition of import
tariffs of 25 percent on steel and 10 percent on aluminium in
March.  urn:newsml:reuters.com:*:nL2N1SU0PP
    "We have not seen major damages from the U.S. duties," Japan
Aluminium Association Chairman Ichiro Okamoto said in an
interview with a small group of media, because Japanese firms
export mostly higher-end products that are not easily replaced
by local U.S. products.
    "What's more worrisome is about the U.S. threat on auto
tariffs as it will have a huge impact on Japanese industries
including aluminium," he said.
    Around 15 percent of Japan's 2 million tonnes of rolled
aluminium production goes to the auto sector. 
    "If trade wars including autos becomes real, it will give an
impact beyond our imagination," he said. 
    The industry body will collaborate with Japanese government 
in its effort to prevent further U.S. action, said Okamoto, who
is also president of Nippon Light Metal Holdings  5703.T .
    The aluminium industry has been roiled after the United
States imposed sanctions on Russia's United Company Rusal
 0486.HK  in April that prevented customers with U.S. exposure
from buying metal from the world's second-largest aluminium
producer.  urn:newsml:reuters.com:*:nL1N1S018U
    Aluminium prices on the London Metal Exchange  CMAL0  jumped
35 percent to seven-year highs after the sanctions announcement,
but an extension of the deadline for companies to wind down
contracts with Rusal quieted the market down amid expectations
for sanctions to be lifted.
    "We are hopeful that the situation will return to normal,"
Okamoto said, adding Japanese companies are widening supply
sources to respond any future emergencies.
    Going forward, Okamoto sees a key growth opportunity in
automobiles, including electric vehicles, as carmakers seek to
cut the weight of vehicles to help slash emissions and meet
tough government pollution standards.
    Metals consultancy CRU has forecast demand for aluminium
from electric and hybrid vehicles to increase ten times to
nearly 10 million tonnes by 2030.  urn:newsml:reuters.com:*:nL8N1QA646
    "Aluminium can be used in auto bodies as well as internal
parts," Okamoto said. 
    Demand for aluminium foils used in package of automotive
lithium-ion battery is also rapidly rising, he said.
    "The packaging materials require high quality and this is
where Japanese manufacturers can input advanced technology."

 (Reporting by Yuka Obayashi; Editing by Christian Schmollinger)
 ((Yuka.Obayashi@thomsonreuters.com; +813-6441-1798; Reuters
Messaging: yuka.obayashi.thomsonreuters.com@reuters.net))