SHANGHAI Aug. 01(CBI China):--China's State Taxation Bureau adjusted export rebates for products on July 31st, canceling altogether export rebates on unwrought silver and special high grade (SHG) zinc. Before the adjustment, unwrought silver and SHG zinc enjoyed 5% export rebates.
China's exports of refined zinc have been slowing since early 2008, with exports totaling 41 kt during the first half of 2008, down 78.5% YoY. News of falling exports from China could stimulate LME zinc prices to rise, but its impact will only be short-term.
As China imposes quotas on silver exports, cancellation of export rebates will affect those enterprises with export quotas. Most of enterprises with export quotas were large domestic smelters, and those smelters said they had priced exports in the coming 2-3 months in advance, so they will not be immediately affected by the rebate cancellation. However, mine operators believe smelters will now become more cautious when purchasing high-silver concentrate. Impact from the cancellation of export rebates may be offset by price adjustments between domestic prices and LME zinc prices, as well as a higher RC of silver.