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    Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

    Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

    U.S. aluminum executives claim Liu Zhongtian, founder of Chinese metals conglomerate China Zhongwang, used a factory in Mexico to game the global trade system


    An aerial view of the aluminum stockpile around Aluminicaste Fundición de México’s San José Iturbide plant in June 2016. PHOTO: MIKE RAPPORT


    By SCOTT PATTERSON in Los Angeles,
    JOHN W. MILLER in San José Iturbide, Mexico and
    CHUIN-WEI YAP in Liaoning, China

    Updated Sept. 8, 2016 1:46 p.m. ET 63 COMMENTS

    Two years ago, a California aluminum executive commissioned a pilot to fly over the Mexican town of San José Iturbide, at the foot of the Sierra Gorda mountains, and snap aerial photos of a remote desert factory.

    He made a startling discovery. Nearly one million metric tons of aluminum sat neatly stacked behind a fortress of barbed-wire fences. The stockpile, worth some $2 billion and representing roughly 6% of the world’s total inventory—enough to churn out 2.2 million Ford F-150s or 77 billion beer cans—quickly became an obsession for the U.S. aluminum industry.


    Now it is a new source of tension in U.S.-Chinese trade relations. U.S. executives contend that the mysterious cache was part of a brazen scheme by one of China’s richest men to game the global trade system.


    Liu Zhongtian, chairman of China Zhongwang Holdings Ltd., toasts the company’s share listing in Hong Kong on May 8, 2009. PHOTO:IMAGINECHINA/ZUMA PRESS


    Aluminum-industry representative Jeff Henderson says he is convinced that China Zhongwang Holdings Ltd., a Chinese aluminum giant controlled by billionaire Liu Zhongtian, tried to evade U.S. tariffs by routing aluminum through Mexico to disguise its origins, a tactic known as transshipping.

    “My Moby-Dick has been Zhongwang,” says Mr. Henderson, president of the Aluminum Extruders Council, a U.S. trade group.


    Mr. Liu, a member of China’s ruling Communist Party, denies any connection to the Mexican aluminum or transshipping.

    “These things have nothing to do with me,” he said in a June interview at his company’s Liaoning, China, plant, where he lives in an apartment inside the factory. He said he wouldn’t know how to establish a business in Mexico, joking that “in that sort of place, there are a lot of killers with guns.”





    Company records, trade documents and legal filings reviewed by The Wall Street Journal, along with interviews of people who have done business with Mr. Liu, raise doubts about his account. They show that hundreds of thousands of tons of aluminum were shipped to Mexico from China through a series of companies, including one owned by Mr. Liu’s son and one by someone who describes himself as a longtime business associate of the Chinese billionaire.

    The U.S. Commerce Department says it is investigating the Mexican aluminum’s origin as part of a slew of trade complaints by the U.S. metals industry against China, many of which include allegations of transshipping.


    China’s booming industrial production has reordered global markets, few more dramatically than aluminum. Fueled by access to inexpensive electricity and tax breaks, Chinese aluminum output doubled between 2010 and 2015. With local demand slowing, more of it was sent to the U.S., which was importing 40% of its aluminum by 2015—up from only 14% in 2010.


    By the end of 2016, only five aluminum smelters will be operating in the U.S., down from 23 in 2000.


    Alcoa
    Inc., the largest American aluminum maker, is splitting in two, isolating its profitable parts-making units from its troubled raw-aluminum operations. Alcoa Chief Executive Klaus Kleinfeld last year said illegitimate Chinese exports were “the major driver” of lower aluminum prices.


    Mr. Liu’s ascent as an aluminum mogul began in 1993, when he started building his company from a small domestic player in northeast China into one of the world’s top producers. China Zhongwang’s main business is making aluminum “extrusions”—pipes, rods and panels used in finished products such as window frames, refrigerators and automobiles. Extrusions are formed by forcing heat-treated aluminum through a die, like dough through a cookie cutter.

    He took China Zhongwang public in Hong Kong in May 2009, retaining a 74% stake while he raised $1.26 billion in one of the world’s biggest initial public offerings of the year. While a nearly 50% decline in China Zhongwang’s stock since the IPO has cut into Mr. Liu’s fortune, he remains among China’s wealthiest businessmen, with a net worth estimated by Forbes magazine at around $3 billion.


    The same year, Chinese aluminum-extrusion exports to the U.S. more than doubled from 2008 to 192,000 tons. U.S. prices for imported extrusions plunged 30% from the previous year, according to Global Trade Information Services, or GTIS, which tracks world-wide trade.


    The burst of exports led to a finding by the Commerce Department that several companies, including affiliates of China Zhongwang, were selling cut-rate aluminum while receiving subsidies back home. In 2010, it slapped punishing tariffs on certain aluminum imports, including those from what it dubbed the “Zhongwang Group Companies.”


    China Zhongwang’s U.S. shipments ground to a halt, and its 2010 profits fell 26% from the previous year. The company never responded to the U.S. government’s questions about its trade practices, the Commerce Department said. It also didn’t respond to several requests for comment about the matter for this article.

    Around this time, an ambitious young businessman, Po-Chi “Eric” Shen, a native of Singapore who had attended the University of California at Berkeley, began shopping for real estate in Mexico. He settled on a plot near San José Iturbide, about 160 miles northwest of Mexico City and about 500 miles from the U.S. border at Brownsville, Texas. There, a company Mr. Shen helped establish, Aluminicaste Fundición de México, developed plans to construct a $200 million factory to melt aluminum into raw metal.


    Po-Chi ‘Eric’ Shen answers a question during a public hearing about an aluminum project he was advocating in Barstow, Calif., in April 2015.PHOTO: MIKE LAMB/DESERT DISPATCH


    Mr. Shen had a history with the Liu clan. He was friends with Mr. Liu’s son, Liu Zuopeng, known as ZP, who lived in Southern California, where the Liu family owns several houses. Mr. Liu’s wife became a board member of one of his companies, Scuderia Development, corporate records show.

    Another of Mr. Shen’s companies, Scuderia Capital, in 2008 had lent China Zhongwang $200 million, according to China Zhongwang’s prospectus.


    In Mexico, Mr. Shen was implementing an audacious plan, according to people familiar with the matter: A network of trading companies could route hundreds of thousands of tons of aluminum from China to Mexico, where a plant would melt it for shipment to the U.S., evading trade restrictions and claiming North American Free Trade Agreement benefits.


    In an interview, Mr. Liu said he wasn’t involved in Aluminicaste and didn’t help Mr. Shen finance the plant. “I don’t even know him very well, why would I give him money?” he said.


    Mr. Shen, in several interviews with the Journal, described extensive and longstanding business ties with Mr. Liu and his family. “Mr. Liu and I had a very complicated business relationship that was neither employer or employee, nor investor or investee,” he said.


    On paper, China Zhongwang’s days of relying on overseas sales were over. Its 2011 annual report said 96% of its revenue derived from sales inside China, up from 56% in 2010.


    In fact, Chinese trading firms that bought aluminum from China Zhongwang resold much of the product to a commodity trader in Singapore called GT88 Capital, according to shipping records and people familiar with the matter. The owner of GT88: Aluminicaste’s Mr. Shen.


    In 2011 and 2012, Mexico’s aluminum-extrusion imports surged. Most of the metal was delivered by Mr. Shen’s Singapore trading firm to Aluminicaste’s logistics company, according to shipping records tracked by Panjiva Inc., a New York trade-data company.



    Rumors of the facility, and the giant stockpile, began circulating among U.S. producers. “No one really knew what was going on,” said the executive who commissioned the aerial photos of the plant, Mike Rapport, who runs an aluminum-extrusion company in southern California.

    In 2013, Aluminicaste ownership transferred to Mr. Liu’s son, who became CEO of the facility, Mexican corporate records show.


    Mr. Liu says he wasn’t a party to any of this. He says he “scolded” his son when he found out he had taken over Aluminicaste. “In this matter, I have not helped him,” he said in an interview. “I was very dissatisfied. I told him, if you want to do this line of work, you come back home.” The younger Mr. Liu didn’t respond to multiple requests for comment.

    Mr. Shen set up shop in an upscale Dallas office employees dubbed the “Sugar Building,” after a film studio that formerly owned it. It sported a pair of executive suites, one of which had a $100,000 bed, according to a former employee.

    He also snapped up expensive houses, rare cars and a Gulfstream private jet worth $10 million, records in a Dallas county court case show. He purchased a 1963 Ferrari valued at $32 million—one of the highest prices ever paid for a car at the time—and more than $70 million of rare red diamonds, according to the court records. Many of the purchases were for business use or investments, according to Mr. Shen.


    But there was still a missing piece. People familiar with the matter say Aluminicaste needed a buyer in the U.S. to remelt its product and prepare it for sale there. To solve the problem, Mr. Shen began laying the groundwork for a $1.5 billion plant in Barstow, Calif., a struggling city in the Mojave Desert about 100 miles northeast of Los Angeles.


    Hundreds of trucks pass through a police checkpoint on a highway not far from San José Iturbide, where nearly a million tons of aluminum piled up around a factory. PHOTO: JANET JARMAN FOR THE WALL STREET JOURNAL


    Mr. Shen told city officials he was backed by the billionaire founder of China Zhongwang, Mr. Liu, and that he had just built a large aluminum factory in Mexico, says Oliver Chi, then-assistant Barstow city manager.

    In late 2013, Mr. Shen convened a meeting between local officials and Mr. Liu in Irvine, Calif., according to Mr. Chi.

    Over dim sum, Mr. Liu said he harbored reservations about the project, explaining that Chinese companies receive substantial financial assistance from the government, which he doubted he would get in the U.S., said Mr. Chi, who attended the meeting.


    In an interview, Mr. Liu said he attended the meeting to discuss “environmental issues, not to discuss investing in it.”


    Meanwhile, setbacks were piling up. Trucks and metal were stolen from the Mexico facility, slowing deliveries, former Aluminicaste employees say. The company failed to obtain Nafta benefits after U.S. authorities concluded that the metal came from China.


    Amid mounting financial troubles at Aluminicaste, associates of Mr. Liu accused Mr. Shen of mismanaging company funds, according to people familiar with the allegations and court documents.


    They moved to seize Mr. Shen’s assets, including his private jet, expensive cars and a luxurious home in Newport Beach, Calif. Management of the company that owned the Sugar Building in Dallas, DFW Maple Leaf Partners, transferred to Mr. Liu’s wife, corporate records show.


    Mr. Shen denies wrongdoing. His attorney, Dean Kajioka of Kajioka & Associates, a Las Vegas law firm, said Mr. Shen agreed to hand over his assets after he was “threatened physically” by Mr. Liu’s associates. A China Zhongwang spokeswoman said Mr. Liu declined to comment on the allegation.


    The drama has sometimes veered into slapstick. In 2014, Mr. Shen wrecked a rare McLaren F1 sports car while on a driving tour in the Italian countryside. The crash made the news after fellow McLaren enthusiast Rowan Atkinson, the British comedic actor who plays “Mr. Bean,” came to his aid.





    Mr. Liu has claimed the car belongs to him. In February, the law firm Latham & Watkins LLP wrote a letter to McLaren, reviewed by the Journal, stating that it is acting on behalf of Mr. Liu and that the vehicle was transferred to him in partial repayment of $400 million of his own funds he claims Mr. Shen misappropriated. Mr. Shen disagrees, saying it is still his car.

    Latham & Watkins declined to comment. Mr. Liu didn’t respond to a request for comment.


    The clash over Mr. Shen’s finances helped dash the Barstow project, as the Mexican aluminum continued to accumulate.

    For Mr. Henderson, proving China Zhongwang and Mr. Liu stood behind the Mexican aluminum stockpile became an obsession. Last October, his trade group, which counts Alcoa and Rio Tinto PLC as board members, filed a 600-page petition with the Commerce Department alleging that Mr. Liu and his family are using a network of affiliated companies to evade U.S. antidumping prohibitions.

    The petition cites a report by a little-known short seller calling itself Dupre Analytics, which drew connections between China Zhongwang, Mr. Liu’s family and Aluminicaste. Dupre, which hoped to profit from a decline in the Chinese company’s share price, was aided by the results of a separate U.S. aluminum industry-funded investigation into China Zhongwang’s activities in Mexico and China, according to people familiar with the probe.


    Trading in China Zhongwang’s shares was suspended in Hong Kong for several days after the report’s release. At the time the company said the allegations were “factually incorrect.”


    Despite his setbacks, Mr. Liu is still thinking big. Last month, a company controlled by him and affiliated with China Zhongwang agreed to acquire Cleveland aluminum producer Aleris Corp. for $1.1 billion, which would mark the highest price ever paid by a Chinese company for a U.S. metals outfit.


    These days, Aluminicaste is under new management and Mr. Liu’s son is no longer listed as an owner. California attorney Charles Pok, who says he now helps run the company, denies any connection between the Mexican plant, the elder Mr. Liu and China Zhongwang. “I do not have a business relationship with Mr. Liu,” he said.


    But Mr. Liu said in an interview that Mr. Pok has worked for him in the U.S. and Mexico since at least 2004. “Mr. Pok charges me several hundred dollars an hour,” he said. “Even when he just sits on the plane, he takes the money.”


    Mr. Pok later conceded that Mr. Liu is his client but that he was unable to discuss the matter due to attorney-client privilege.


    Mr. Pok has also taken over a number of jobs handled by Mr. Shen. In January 2015, he was named president of Eighty Eight Investments AG, the Swiss holding company for GT88, the Singapore trading company that shipped aluminum to Mexico.


    Employees continuously sweep and clean at Aluminicaste Fundición, a large aluminum foundry in San José Iturbide, Mexico. PHOTO: JANET JARMAN FOR THE WALL STREET JOURNAL


    As for the giant pile of aluminum, it isn’t so big anymore. Last year it was moved to a field beside the factory, covered with a tarp and bales of hay, according to city officials, neighbors and former Aluminicaste employees. Now, plans are afoot to ship the metal stash to a Vietnam site owned by Global Vietnam Aluminum Co., according to people familiar with the matter. A Global Vietnam director, Jacky Cheung, is the new CEO of Aluminicaste. Thousands of tons of aluminum have gotten trucked out of Aluminicaste’s facility destined for Vietnam, according to observers and people familiar with the matter. As of June, more than $400 million worth of aluminum had been shipped from Mexico to Vietnam, according to the Mexican Secretariat of Economy. Mr. Cheung declined to comment.

    Vietnam has already seen a surge of aluminum imports from China. Shipments of Chinese aluminum extrusions to Vietnam jumped more than 1,000% in 2015 to $1.9 billion, according to GTIS. Another $1 billion worth was shipped to Vietnam from China through July this year. Mr. Henderson says he expects much of the Vietnamese aluminum to land in U.S. markets.


    Some already has. Since late 2014, Global Vietnam has shipped some 2,000 tons of aluminum to the U.S., according to Panjiva. One of its buyers: Perfectus Aluminum Inc., a California company started by Mr. Liu’s son.

    http://www.wsj.com/articles/chinese-...ert-1473356054

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    Yes - that is how they operate. Nothing is too sneaky or underhanded for them - even toxic malamine in baby formulas and lead paint on children's toys.
    GeorgiaPeach likes this.

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    Homeland Security Probes U.S. Aluminum Firms Over Chinese Imports

    Investigation focuses on whether Zhongwang-made products were disguised to avoid punitive U.S. tariffs

    ENLARGE
    The U.S. companies examined by Homeland Security investigators include New Jersey-based Aluminum Shapes. PHOTO: JOHN W. MILLER/THE WALL STREET JOURNAL


    By SCOTT PATTERSON and
    JOHN W. MILLER
    Oct. 26, 2016 9:01 a.m. ET 22 COMMENTS

    Federal investigators have launched a probe into whether U.S. companies linked to a Chinese billionaire illegally avoided punitive import tariffs on Chinese aluminum, according to people familiar with the investigation.

    Department of Homeland Security agents in recent weeks questioned former employees of companies associated with Liu Zhongtian, the founder and chairman of aluminum giant China Zhongwang Holdings Ltd., the people said.


    Homeland Security has been coordinating with the U.S. Department of Justice on the probe, some of the people said.

    Agents are investigating whether the companies committed criminal or civil violations that could include smuggling, conspiracy and wire fraud, they said.


    The Journal reported in September that the U.S. Commerce Department is investigating whether Aluminum Shapes LLC, a New Jersey company, imported pallets to remelt as a way to avoid tariffs, part of a broader probe into Mr. Liu’s activities.

    The Commerce Department said preliminary findings would be released in coming weeks. Aluminum Shapes last month denied that the pallets were used as raw material for its plant.


    RELATED






    Homeland Security’s investigation, which is in its early stages, is focusing on whether aluminum products that Zhongwang produced in China—and which are subject to U.S. tariffs as high as 374.15%—were brought into the U.S. in the form of shipping pallets at much lower tariff rates, people familiar with the matter said.

    Homeland Security is also investigating whether nearly one million tons of aluminum shipped to Aluminicaste Fundición de México, a factory once owned by Mr. Liu’s son, were part of an effort to evade U.S. tariffs by routing the metal through another country to disguise its origins, the people familiar with the investigation said.


    Mr. Liu and China Zhongwang were subjects of a September Wall Street Journal article detailing allegations that firms linked to Mr. Liu routed aluminum through Mexico in an effort to disguise its origin and avoid American tariffs. Mr. Liu denied any connection to the Mexican stockpile.


    Charles Pok, a California attorney who has represented Mr. Liu and currently helps run Aluminicaste, said it “is a totally misguided allegation” to claim the Mexico business shipped aluminum into the U.S. in circumvention of tariffs.

    The U.S. companies examined by Homeland Security investigators include Aluminum Shapes and Peng Cheng Aluminum Enterprise Inc. in Walnut, Calif., according to people familiar with the matter.


    “Most of the questions were about the pallets,” said Garry Goehring,a former Aluminum Shapes manager who says two Homeland Security agents recently interviewed him about his time at the company. The agents asked about Mr. Liu and whether pallets stored at Aluminum Shapes came from overseas, among other things, Mr. Goehring said.


    Solomon Rosenthal, a spokesman for Aluminum Shapes, said the company isn’t aware of the Homeland Security investigation or of any illegal imports of aluminum shipping pallets. “We welcome an official investigation and will participate and assist in any way possible, as we have not engaged in any improprieties,” he said.


    A China Zhongwang spokeswoman said the company hasn’t been contacted by U.S. authorities about an investigation and that neither Zhongwang nor Mr. Liu have ties to Aluminum Shapes or Peng Cheng.


    In December 2014, Peng Cheng and Aluminum Shapes merged into Perfectus Aluminum, a California company launched by Mr. Liu’s son. Perfectus also is a focus of the probe, people familiar with the matter said. Perfectus and Peng Cheng couldn’t be reached for comment.


    Aluminum Shapes has since been spun off from Perfectus, a Shapes spokesman said. Its owner, Jacky Cheung, also owns Perfectus and Aluminicaste. People familiar with the matter say Mr. Cheung is an associate of Liu Zhongtian. Mr. Cheung didn’t respond to requests for comment.


    China Zhongwang is the world’s second-largest producer of “extrusions”—pipes, rods and panels used in finished products. Pallets are made by welding extrusions together.


    The Commerce Department in 2010 found Chinese producers including China Zhongwang received illegal subsidies in China and were “dumping”—selling aluminum products below market price—in the U.S.


    The Commerce Department slapped several of the Chinese producers with tariffs as high as 374.15%. Typical tariffs on other aluminum products are about 5%. That includes pallets, which aren’t subject to punitive tariffs even though they are made from extrusions.


    U.S. aluminum-industry officials last year alleged to the Commerce Department that China Zhongwang disguised extrusions as pallets to export to U.S. companies controlled by Mr. Liu. Shipping records show large numbers of aluminum pallets were delivered from China to Aluminum Shapes and Peng Cheng in recent years.


    Zhongwang says it has exported aluminum pallets to the U.S. and that it follows all established trade laws. An Aluminum Shapes spokesman last month said the company didn’t own the thousands of tons of Chinese-made aluminum pallets warehoused at its facilities and merely charged storage fees to the owner, who the spokesman said was a former Aluminum Shapes executive.


    Mr. Goehring, the former Aluminum Shapes manager who says he spoke to investigators, said the agents showed him black-and-white photos of about three dozen individuals, including Mr. Liu, Mr. Pok and Johnson Shao, who headed Aluminum Shapes and Peng Cheng. Mr. Liu in June said Mr. Shao was China Zhongwang’s U.S. retail agent.


    Mr. Pok said he would “cooperate with any investigation.” Attempts to reach Mr. Shao and Mr. Liu’s son were unsuccessful.


    Mr. Goehring said he quit in 2014 after Mr. Liu accused him of financial improprieties, which he denies. Aluminum Shapes confirmed Mr. Goehring was a former employee.


    The agents also inquired about Chinese workers at the New Jersey plant, Mr. Goehring said. In 2014, Aluminum Shapes brought workers from China to install equipment, according to Mr. Goehring and internal documents reviewed by the Journal.


    Officials with U.S. Customs and Border Protection, part of Homeland Security, examined aluminum imported by Shapes in 2015 and decided they weren’t the kind of extrusions covered by the tariffs, a Customs letter the company provided to the Journal says.

    http://www.wsj.com/articles/homeland...rts-1477486917

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    Giant Aluminum Stockpile Was Shipped From Mexico to Vietnam

    Unusual moves are connected to businesses associated with family of Chinese billionaire Liu Zhongtian

    ENLARGE
    Aluminum under tarps at the remote southern Vietnamese port of Vung Tau. Part of the aluminum stockpile was still in the Mexican desert a few months ago. PHOTO: VU TRONG KHANH/THE WALL STREET JOURNAL


    By SCOTT PATTERSON,
    BIMAN MUKHERJI and
    VU TRONG KHANH
    Dec. 1, 2016 5:30 a.m. ET 45 COMMENTS

    VUNG TAU, Vietnam—One of the world’s largest aluminum stockpiles, which until a few months ago was stored under hay and plastic tarp in a Mexican desert, has been moved to a remote port here in southern Vietnam.

    Starting early this year, 500,000 metric tons of aluminum has been trucked out of the Mexican city of San José Iturbide and shipped to Vietnam, according to shipping records and people familiar with the matter. Much of it now sits under black tarps, guarded by baton-wielding men on motorcycles, at a factory and waterfront complex in this South China Sea port about a two-hour drive south of Ho Chi Minh City.


    The unusually large shipments have captivated traders and aluminum-industry experts and sparked worries about what it means for global markets and aluminum prices. According to Global Trade Information Services, which tracks world-wide trade, Vietnam was the destination of 91% of Mexico’s aluminum-extrusion exports this year—a rarely used trade route for aluminum in recent years.

    The Mexican stockpile, now in Vietnam, was the subject of a Wall Street Journal article in September that traced the metal’s connections to one of China’s richest men, Liu Zhongtian, chairman of aluminum giant China Zhongwang Holdings. American aluminum executives accused Mr. Liu of sending his metal to Mexico to disguise its Chinese origins and evade American tariffs—a charge Mr. Liu and China Zhongwang denied.

    RELATED ARTICLES






    There are connections between businesses associated with Mr. Liu and his family and the metal piling up in Vietnam, according to shipping and business records and people who have studied the shipments.

    Exports of Chinese aluminum extrusions—shaped forms of the metal—to the U.S. are subject to antidumping tariffs as high as 374%, compared with tariffs of about 5% for Vietnamese aluminum extrusions.


    The metal’s journey from Mexico to Vietnam coincided with a surge in exports to Vietnam from two other countries: China and the U.S., via ports near businesses associated with Mr. Liu, according to shipping records and people familiar with the companies.


    For example, 65% of American exports of aluminum extrusions were to Vietnam through August this year, compared with 3% in 2015, according to GTIS. Vietnamese import records show a substantial amount of the aluminum imported from the U.S. this year came from Perfectus Aluminum Inc.


    Perfectus once was owned by Mr. Liu’s son and now is owned by Jacky Cheung, a business associate of Mr. Liu’s who also owns Aluminicaste Fundición de México, a Mexican company that oversaw the Mexican aluminum stockpile, according to business records and people familiar with the matter. Mr. Liu’s son also once owned Aluminicaste.

    ENLARGE



    Mr. Cheung also is one of the owners of Global Vietnam Aluminum Co., which owns the Vung Tau factory where part of the Mexican aluminum is currently stored.

    Mr. Liu has said he had no connection to his son’s businesses in Mexico or the U.S. “In this matter, I have not helped him,” he told The Wall Street Journal in a June interview, referring to Aluminicaste.


    Repeated attempts to reach Mr. Liu’s son for comment were unsuccessful.


    Aluminicaste, which has denied ownership of the aluminum in Mexico, declined to comment. Global Vietnam referred questions to Mr. Cheung, who didn’t respond to requests for comment.


    China Zhongwang spokeswoman Harriet Lau said the company has no connection to the metal in Vietnam.

    “Financially, it does not make commercial sense to stockpile aluminum products,” she said, since shipping and warehousing products is costly and doesn’t generate a profit for the company.


    Mr. Liu, China Zhongwang and Aluminicaste also have denied any connection to the vanished metal stockpile in Mexico.


    All told, since the start of 2015, about 1.7 million tons of aluminum extrusions worth $5 billion have been shipped to Vietnam from Mexico, China and the U.S., according to GTIS.

    The world’s next-biggest reported cache of aluminum is in the Netherlands, a metal-trading hub, and only about a third as big.


    “It’s an enormous stockpile,” says Eoin Dinsmore, an aluminum analyst at business-intelligence firm CRU Group in London, which estimates the Vietnamese cache represents 14% of the world’s total inventory of aluminum. “If it’s moved into other markets, it will have a significant impact” on prices.


    Most of the 1.7 million tons shipped to Vietnam has come through the seaside complex in Vung Tau, according to Mr. Dinsmore, citing satellite photos that show the massive stockpiles. Vung Tau is the primary shipping port of Global Vietnam Aluminum, the only Vietnamese company that could handle a stockpile so large, said Jorge Vazquez, founder of Harbor Aluminum Intelligence LLC, which studies global aluminum markets, including those in Vietnam.


    The U.S. Commerce Department in 2010 accused China Zhongwang of selling aluminum products in the U.S. at below-market rates and slapped it with tariffs as high as 374%.

    In early November, the Commerce Department said China Zhongwang was circumventing those sanctions. China Zhongwang didn’t respond to the 2010 Commerce investigation.

    In a statement last month, the company said it no longer sold the type of extrusion targeted by Commerce in the U.S., in response to the department’s latest investigation.


    A large amount of Vietnam’s aluminum imports has come from China.

    Nearly all of Vietnam’s Chinese aluminum-extrusion imports came from Liaoning province, where China Zhongwang’s plants are located, said Boyden Gray, former U.S. ambassador to the European Union and a founding partner at Boyden Gray & Associates PLLC.

    A representative for Mr. Gray said his firm is studying China Zhongwang and Mr. Liu’s trade activities.


    “It is clear that aluminum products held by Global Vietnam Aluminum were produced by China Zhongwang,” Mr. Gray said, claiming clear ties between Mr. Liu and several of the companies that have received and shipped large shipments of aluminum in the U.S., Mexico and Vietnam.

    http://www.wsj.com/articles/giant-al...nam-1480588228

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    Vietnam suspicious of massive aluminum stockpile linked to Chinese billionaire

    By VnExpress May 4, 2017 | 04:46 pm GMT+7

    The stockpile is believed to have arrived in Vietnam as part of a scheme to evade trade restrictions by a Chinese billionaire.

    Vietnamese officials from three ministries will inspect a giant aluminum stockpile at a foreign company's factory in the southern province of Ba Ria-Vung Tau to see if it has been moved to Vietnam as part of a tariff evasion scheme, the government said.

    Following instructions from Deputy Prime Minister Trinh Dinh Dung, officials from the trade, the finance and the planning and investment ministries will verify the origin and purpose of the aluminum stock, which was reported by the Wall Street Journal to have arrived in the coastal city of Vung Tau late last year.


    The stock is thought to belong to Global Vietnam Aluminium Co Ltd, a $250 million joint venture between Jacky Cheung and Wang Tong, both Chinese-Australian businessmen.


    The company is developing a factory with an annual capacity of 200,000 metric tons of aluminum billet, and it is unclear if the large stockpile of aluminum will be used as raw materials for the upcoming factory or re-exported elsewhere.


    The aluminum is believed to have arrived in Vietnam as part of a scheme to evade trade restrictions, according to U.S. industry officials and foreign media reports.


    Bloomberg
    has traced the stockpile’s connections to one of China’s richest men, Liu Zhongtian, chairman of aluminum giant China Zhongwang Holdings.


    A Wall Street Journal report said the aluminum stock was stored in Mexico before being moved to Vietnam, with about 1.7 million tons of aluminum transported to Vung Tau since 2015 by a company co-owned by one of Liu’s business associates, based on trade and corporate records. Data provided by Global Trade Information Services, which tracks worldwide trade, values the aluminum at about $5 billion.


    With Mexico-Vietnam rarely used as a trade route for aluminum in recent years, the report alleged that the unusual business move may have something to do with hiding the real origin of the metal.


    Exports of Chinese aluminum extrusion to the U.S. market are subject to anti-dumping tariffs as high as 374 percent, compared with those of about 5 percent on Vietnamese aluminum extrusion products, the report said.


    Sending the metal first to Mexico and later to Vietnam would "wash away" its Chinese origin, helping the exporter avoid the stiff tariffs imposed by the U.S.

    http://e.vnexpress.net/news/business...e-3579712.html

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  7. #7
    Senior Member JohnDoe2's Avatar
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    Newmexican likes this.
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  8. #8
    Senior Member JohnDoe2's Avatar
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    This Californian Firm is Being Accused of Illegal Chinese Aluminum Imports

    Reuters
    Sep 14, 2017
    The U.S. Justice Department has accused California-based Perfectus Aluminum Inc of illegally importing aluminum from China, evading $1.5 billion in tariffs, the Wall Street Journal reported citing a government complaint filed on Thursday.

    The Justice Department alleges that Perfectus is “effectively owned” and controlled by Liu Zhongtian, founder and chairman of Chinese aluminum firm China Zhongwang Holdings Ltd , and violated a 2010 Commerce Department ban on certain aluminum imports from China, according to the civil complaint seen by the WSJ.


    The complaint accuses Perfectus of illegally importing more than 2.1 million aluminum pallets from China into the United States between 2011 and 2014, the WSJ said.The complaint also said the government notified the court that it intends to seize a warehouse in Fontana that is owned by Perfectus as part of a proceeding to seize assets, according to the newspaper.

    The Justice Department and Perfectus could not be reached for comment outside regular U.S. business hours.


    Reuters could not immediately verify the contents of the complaint.

    http://fortune.com/2017/09/14/califo...minum-imports/
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  9. #9
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    Chinese millionaires are buying up this country.

    Just wonder if any of them have children born in America while the mother was on 'Chinese vacation'?

    If so, they are in - aren't they?
    Judy and Beezer like this.

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