China’s aluminium products export estimated to grow through 2019 on rising export tax rebate

According to the China Customs data, the country in 2017 had exported 5.08 million tonnes of aluminium semi-finished products all around the globe, out of which aluminium extrusion export was at 826,000 tonnes, aluminium plates, sheets, and strips at 2.08 million tonnes, aluminium foil at 1.16 million tonnes, aluminium tubes and pipe at 136,000 tonnes, and aluminium structures at 879,000 tonnes.

In 2016, China's total aluminium semi-finished products (aluminium bar, rod, and profile, aluminium wire, aluminium plate, sheet, and strip, aluminium foil, and aluminium tube) exports had stood at 4.07 million tonnes (approx.). This indicates that the aluminium semi-finished products export volume from China increased by around 25 per cent year-on-year in 2017.

Industry consultancy CRU observes that this growth is likely to continue in coming months and year next as well, following the boosted tax rebates as part of a package to soften the impact of a trade war with the United States.

The following graph shows the overall trend of aluminium semi-finished products export from China. The graph clearly shows that the export volume had increased year-on-year except an intermittent plunge during August-September 2017. However, it started rebounding from November’17 and continued until June 2018.

According to a message delivered at a State Council executive meeting chaired by Premier Li Keqiang on Monday, October 8, China’s value-added tax (VAT) rebates on some exports will be raised on November 1 to support foreign trade. Shanghai Metals Market believes that this will boost the aluminium industry.

For those who are receiving a tax rebate of 15 per cent or 13 per cent at the present will be raised to 16 per cent for aluminium exports, according to the source. And those who are currently receiving a 9 per cent rebate will get 10 per cent and those receiving 5 per cent will get 6 per cent or even 10 per cent in a few cases.

Products with a current rebate of 13 per cent include aluminium bars, rods, and profiles (HS code 7604), aluminium plates, sheets, and strip, of a thickness exceeding 0.2mm (HS code 7606), aluminium tubes and pipes (HS code 7608), as well as aluminium structures and parts of structures (HS code 7610, 7611, 7612, 7613, 7615, and 7616) and those with a 15 per cent rebate include aluminium foil (HS code 7607), SMM learned. Other products like stranded wires, cables, ropes and similar articles of aluminium (HS code 7614) already receive a full rebate of 16 per cent.

As a trade war with the US escalates, it is hoped that the rebate will encourage domestic companies to export more of such products. Details on the rebate increase are likely to be released in official documents soon. 

The higher rebates will "help reduce costs for the real economy, help it cope with the complex international situation and maintain stable foreign trade growth", according to the meeting.