China Cuts, Scraps Taxes on Aluminum, Steel Exports
China, the world’s largest producer of aluminum and steel, will lower or scrap export taxes next month on some shipments of the metals to try to bolster slowing economic growth.
The tariff on aluminum alloy rods and bars with a circumference of less than 210 millimeters (8.3 inches) will be reduced to 5 percent from 15 percent from Dec. 1, the Ministry of Finance said in a Web site statement dated Nov. 14. Export taxes will also be revoked on steel products including hot-rolled coils and plates, large sections and alloy strips and wires, it said.
The export tax changes are part of China’s effort to cut tariffs and raise tax rebates on 3,770 items to stimulate growth, which was announced last week by the State Council. The country will also restore tax rebates on some copper and other industrial metal exports by early next year, the China Nonferrous Metals Industry Association said.
A cut in aluminum alloy export taxes “is expected to have a minimal effect” because of “a collapse in aluminum demand from international markets” and lower London prices, Macquarie Group Ltd. analysts led by Bonnie Liu wrote in a report dated Nov. 15. Scrapping steel exports “will probably not fundamentally improve the steel export momentum,”the analysts wrote.
Chinese exports of aluminum alloy rods and bars accounted for less than 1 percent of total Chinese exports of 1.5 million tons of the lightweight metal’s products in the first nine months, according to Macquarie.
“No overseas traders will buy large volumes of steel from China for future delivery with a one- or two-month time lag, regardless of the export tax position, given the huge price volatility in global markets at the moment,” the analysts said. “Steel exports will continue to fall in November and December.”
China on Nov. 9 announced a 4 trillion yuan ($586 billion) stimulus package after slowing exports and falling output signaled a deepening slowdown. Gross domestic product grew by 9 percent in the third quarter from a year earlier, the least in five years, while industrial output last month expanded at the slowest pace in seven years.
Tags: aluminum, export, exports, Metal, steel