Ken Buck Introduces Legislation to Ensure Fair Aluminum Pricing
For Immediate Release
Contact: Kyle Huwa, 202-225-4676
Washington, D.C. – Today, Reps. Ken Buck (CO-04) and Jim Costa (CA-16) introduced bipartisan legislation (H.R. 6927) to ensure a fair and free market for the pricing of aluminum in the United States. The Aluminum Pricing Examination (APEX) Act grants the Commodities Futures Trading Commission (CFTC) the statutory authority to conduct oversight of the aluminum market and to investigate price setting, benchmarking, and reporting entities. At the same time, the bill enables the Department of Justice to consult with the CFTC to be sure that all regulatory and oversight actions align with anti-trust statutes.
“Our beverage and beer industry, along with so many other job-creating industries, rely on a fair and free market for aluminum purchases,” stated Congressman Ken Buck. “To avoid perversions of the free market, like monopoly pricing, we need to fully equip the CFTC, alongside the Justice Department, to investigate pricing irregularities that have been plaguing the aluminum market for months now.”
The APEX Act comes at a time when the price of sheet aluminum has faced troubling irregularities. There is a sole reference price that operates like a shipping and handling fee added to the cost of sheet aluminum in the U.S., called the Midwest Premium (MWP). This price, set by S&P Global Platts, the sole company responsible for the pricing methodologies and benchmarking of the aluminum markets, has more than doubled (137%) since early 2018. This unforeseen price variation doesn’t reflect the fundamentals of the market. Part of this price increase may be attributed to a reliance on duty-paid prices. End-users of aluminum in Colorado have noted that producers are selling 100% of their aluminum at a price that factors in the duty, or tariff, the producer paid to the government, even though around only 30% of the aluminum these producers are selling was originally subject to a duty when they purchased it from the original supplier. Much of the other 70% comes from recycled aluminum that does not have a duty assessed. The sharp increases in price have negatively impacted both end users of aluminum and consumers who buy water, soda, beer, and other household goods made from aluminum.
With the APEX Act, the government will be able to play its proper oversight role in the aluminum market, ensuring with the Department of Justice that price-setting entities in the market are acting fairly and transparently, complying with all anti-trust statutes.
This summer, Rep. Buck sent a bi-partisan letter to the Attorney General, along with 31 of his colleagues, asking the Department of Justice to examine possible antitrust violations in the pricing of aluminum.