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The news dampens domestic zinc prices which have fallen 11% from early November.
It is quite possible for the China Central Government to cancel export tax rebates for specific high-grade refined zinc and impose export taxes, as the Government made great efforts to prevent the zinc industry form overheating in the past year but the result was disappointing. The Central Government imposed a 5% export tax on 1# zinc in January 2007 and then increased tax to 10% in June 2007. However, January to September 2007 statistics show China zinc output increased 19% YoY and exports rose 44% YoY. Hence the Central Government will inevitably continue to strengthen control over the overheated development of the zinc industry.
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