STOCKHOLM (Reuters) - Sweden's Granges (ST:GRANG) put on ice on Friday plans to form an aluminum manufacturing joint venture in the United States with Japan's Mitsubishi Aluminum Co (T:5711), saying that the project was less attractive in "current circumstances".
It did not specify what circumstances it was referring to though a Granges spokeswoman later said they were related to the feasibility of the project and did not have to do with U.S. tariffs on aluminum imports.
U.S. President Donald Trump has imposed tariffs on imported aluminum and steel as well as on a long list of imports from China, which include many machinery parts or products needed by manufacturers, prompting retaliatory measures from Beijing.
The venture aimed to combine Granges' and Mitsubishi Aluminum's expertise in aluminum rolling and establish a new U.S. production facility to manufacture advanced aluminum materials for brazed automotive heat exchangers for the North American and Mexican markets.
"Granges has decided to halt the plans for a joint venture in North America, as the project isn't sufficiently attractive for Granges from a risk-reward perspective given the current circumstances," the company said in its statement on Friday.
"It doesn't have to do with the market conditions...It's more about the project itself," said Pernilla Grennfelt, senior vice president for communications and investor relations, declining to be more specific.
Yet, she said U.S. tariffs were impacting Granges in different ways.
The company is seeking exemptions to continue importing from Europe certain aluminum coil and aluminum sheet products that it needs to make products in the United States needed by U.S. automotive clients, she said.
Granges last year had already begun to gradually shift production of foil products for U.S. customers from Shanghai, China to Finspang, Sweden after the U.S. imposed countervailing and anti-dumping duties on imports of such products from China.
The company said on Friday it remained "strongly committed" to the North American market, adding that it was on track with its plans to invest $110 million to expand capacity at its Tennessee operations in the United States.
Granges is also exploring business opportunities for advanced aluminum materials for brazed automotive heat exchangers in North America, it said.