Aluminum Wheel Exports Rise to US and Mexico Amid Trade War Worries
In December 2024, China experienced an uptick in the export of aluminum alloy wheel hubs, reaching a total of 75,500 mt. This marked a 4% year-on-year and month-on-month increase. The primary destinations for these exports were the US, Japan, Mexico, South Korea, and Thailand, accounting for 29%, 19%, 11%, 9%, and 5% of the total exports, respectively. Notably, the US saw a resurgence in its share, climbing to 29% from the previous period. Conversely, Japan’s stake decreased from 24% to 19%. This surge in exports was attributed to concerns surrounding potential trade conflicts and tariff wars following the upcoming change in US presidential administration.
During this period, the US, Mexico, and Canada emerged as key markets for “rush exports” in the aluminum wheel sector. Export numbers to the US spiked by 15% month-on-month, while Mexico and Canada saw even more significant increases at 31% and 18% month-on-month, respectively. Concomitantly, Japan and South Korea experienced a decline in their export shares. Notably, Mexico surpassed South Korea to become the third-largest destination for aluminum wheel exports in December.
Riding on the coattails of prior tariff wars, Mexico is believed to have surged in demand, particularly as many wheels sent to Mexico may be assembled locally before being shipped as complete vehicles to the US. This likely explained the substantial growth in Mexico’s export volume during the month. Despite the rebound in December, analysts at SMM caution that the rush in exports was largely a preemptive move to adapt to potential tariff hikes.
Looking ahead, the outlook for aluminum wheel exports remains uncertain amidst a backdrop of rising trade protectionism and tariff implementations. Recent data reveals that reliance on the top five export destinations accounts for over 60% of total export volumes. Over the last two months, this reliance has been even more pronounced, with the top three target countries absorbing 60% of total exports. China’s vulnerability to fluctuations in key markets underscores the need to diversify export destinations and potentially pivot back to domestic sales or establish overseas manufacturing facilities.
Despite the challenges, some companies have started exploring alternative markets to mitigate risks associated with overdependence on specific countries. However, in the short term, prevailing trade dynamics suggest that aluminum wheel exports may face hurdles in the first half of 2025. The industry is bracing for a potential overall decline in export volumes as it navigates the complexities of shifting trade landscapes and evolving tariff policies.