Aluminum in the News: What You Should Know

Recently, aluminum and aluminum foil producers have been in the news in regards to an anti-dumping case brought on by the Aluminum Association.  The case accuses Chinese aluminum manufacturers of unfairly flooding the US Aluminum market with product and driving American producers out of competition.  The association is asking for as much as a 138% duty increase on companies importing aluminum foil from China which they hope will create space in the market for American producers to fill.  While this case on the surface seems to benefit American businesses, we believe its all encompassing nature may disrupt the thin gauge aluminum market that we and our customers operate in.

The thin gauge portion of the aluminum market used in flexible packaging is but a small share of the world’s total aluminum production.  By the Aluminum Associations own calculations it accounts for less than 5% of the entire aluminum market.  On top of that, this sector of the aluminum market is the one that American Aluminum producers are least prepared to fill – as Catty has experienced through its many years of sourcing aluminum foil.

At Catty Corporation, we are proud to convert all of our products here in the United States and we do our best to source from as many US-based vendors as we can to convert our products. We are the oldest foil converter in the United States and bought exclusively from US Aluminum Suppliers for over half a century. The market however has driven us, and the packaging industry as a whole, away from US-based aluminum foil producers long before China’s recent market-share-gain. This change was, as we will describe, more due to quality issues with the thin-gauge foil produced by US Mills than purely price.

In the late 1990’s, Catty was buying close to 25% of its aluminum foil from domestic sources.  During this period we experienced print-ability issues with the foil’s surface and severe wrinkling among other quality issues.  These defects occurred at a significant rate when compared to our other foil suppliers in Europe and Asia and towards the end of the decade things were only getting worse.  At one point, the 25% of our total foil that was supplied domestically was the source of over 95% of our raw material rejection.

Also during this time, the industry was growing and our customers were starting to demand higher speeds, thinner material, and overall better performance from our wraps.  This emphasized Catty’s need for high quality foil and further pushed us away from domestic suppliers.

Now despite the struggles we had with domestic suppliers at the time (late 1990’s), we found the international foil market to be quite strong as we ventured further into it.  European aluminum producing mills continued to supply high quality material for us but we also found excellent partners in Asia (both China and S. Korea) who had the proper equipment to supply us with the quality raw material we needed.

Overall, Catty believes that the thin gauge aluminum foil market is a globally competitive market not in need of the additional tariffs proposed by the Aluminum Association.  We have sent representatives to Washington, DC to tell our side of the story and have reached out to several key industry organizations for their help in raising awareness.  Additionally, we are working with our current network of aluminum foil suppliers and beyond to assure we have options to continue to supply outstanding quality product as the situation evolves.