HONG KONG, Oct. 28 -- China is highly likely to raise export tax rebates on fabricated copper products to at least 15% by the end of 2009, said delegates at MB's 6th Asian Copper Conference in Hong Kong.
The rebate, currently 13% for most copper coil, foil and tubes, could be raised to help Chinese exporters already struggling because of the downturn in global demand.
"The recovery of the global economy is not [yet] proven, and Chinese exports are still weak, I think the Chinese government will increase the tax rebate by the end of year," said Johnson Chan, head of the Structured Trade Finance from Overseas-Chinese Banking Corporation Ltd.
Rebate are subtracted from standard export VAT of 17%, so a 15% rebate results in a 2% duty.
Any move by Beijing to ease the cost of exporting will be closely watched by overseas manufacturers and governments, who fear that cheap Chinese products could disrupt world markets.
"I don't think the lifting of rebates means protectionism so I am still convinced of the increase, even against the background of more anti-dumping incidents involving Chinese export products," Chan added.
The current 13% rate was raised from 5% after the financial crisis last year. There is also a 17% rebate on copper foil below 15mm thickness, which was raised from 11%.
The rebate may help ease domestic oversupply of some products.
"China will face serious problems in the next three years, given rising capacity," said Wang Jianli, executive director of Xingye Copper International Group.
He said he had already proposed higher rebates in discussion with the China Nonferrous Metals Industry Assn (CNIA) in recent weeks.
Chinese fabricators are likely to see another 700,000 tpy of new copper strip and plate capacity commissioned this year and next, said Chen Hongzhou, vice manager at the marketing department of Chinalco Luoyang Copper Co.
This will help depress processing fees, as too many producers compete for business.
"The processing charges are falling, especially for copper strip and plates," he said. Offer prices have fallen by more than half, he added.
(Source: Metal Bulletin)