The Aluminum Extruders Council (AEC), a U.S. trade group, has filed a petition against China Zhongwang Holdings Ltd. alleging the company has systematically and illegally evaded duties on aluminum extrusions imported into the United States. The alleged scheme involves hundreds of millions of pounds aluminum extrusions that were cut and welded into aluminum slabs.

Upon entering the U.S. these extrusions are being identified as pallets even though the evidence the AEC has gathered shows the sole purpose of these extrusions is to re-melt them back into billets.

Billet is the starting stock for the aluminum extrusion operation. Extrusion billet may be a solid or hollow form, commonly cylindrical, and is the length charged into the extrusion press container that then is pushed through the die to form extruded profiles that are often cut to length and further processed into final products.

The anti-dumping and countervailing duties were introduced in 2011 after the U.S. Department of Commerce found that the domestic industry suffered declines in production and shipments due to unfair imports from China.

In late July, the AEC called on U.S. Customs and Border Protection to investigate issues of transshipment and circumvention by Zhongwang. “We have made our case to U.S. Customs regarding the transshipment allegations, and now we are filing our circumvention case with the Department of Commerce,” said Jeff Henderson, Director of Operations at the AEC.

The circumvention case also alleges that China Zhongwang has been exporting certain alloy extrusions into the U.S. in order to avoid U.S. antidumping and countervailing duties. The Department of Commerce has forty-five days to review and decide whether or not to launch a full investigation.

China accounts for over 50 percent of the world’s aluminum output. Chinese aluminum exports are up 22 percent this year compared to 2014.