New | Chinese owned Zhongwang USA enters US aluminium market with buy of Aleris

Zhongwang USA LLC, backed by Chinese aluminium magnate Liu Zhongtian, said on Monday it would buy US aluminum company Aleris Corp in a bet by the billionaire that the nascent US automotive aluminium sector will be the industry’s next big growth market.

The US$2.33 billion deal comes as Liu and Zhongwang International Group Ltd, the parent of Zhongwang USA, are embroiled in a dispute over US import duties amid broader trade tensions between the US aluminium industry and China.

It marks the biggest entry by a Chinese company into the US aluminium industry since trade tensions began ramping up in recent years.

Zhongwang International is parent of China Zhongwang Holdings Ltd, the world’s second-largest producer of aluminium extrusions. It has been accused of evading US import duties on extruded products, prompting an investigation by the US Department of Commerce (DOC).

The acquisition has strategic importance because Aleris is in the midst of a $350 million expansion of Its Lewisport, Kentucky rolling mill produces automotive body sheet for US auto manufacturers. It hopes to produce 200,000 tonnes per year and begin shipping in 2017.

Liu said in a statement that Aleris is “well-positioned to capitalise on the positive demand trends we see globally.”