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China's Next Round of Rebate Cuts May Include Aluminum Semis
Aug 18, 2010 14:31CST
Source:SMM

HONG KONG, Aug. 18 -- China may consider a cut in tax rebates for semi-finished aluminum products in its next review, industry sources and analysts said on Tuesday, likely lowering output in the world's biggest producer of the metal.

Aluminum products are the only base metal that now qualifies for tax rebates. But Vice Commerce Minister Jiang Yaoping had said last week that China may cut a series of tax rebates given to exporters of energy-intensive products.

"Cutting rebates would impact primary aluminum consumption, which may spur smelters to lower output," said Li Yang, a senior analyst at state-backed research firm Antaike.

Aluminum was left out of a July list that eliminated rebates on all the other five base metal products, Antaike's Li said.

"Aluminum should not be able to escape this time," he said. China had left tax rebates on aluminum products untouched at between 13 and 15 percent on worries of a slump in consumption in the world's biggest market, smelter sources said.

However a manager at an aluminum product manufacturing plant in Guangdong said he believed Beijing was talking to relevant departments on whether to cut the current rebate of 13 percent to 8 percent on aluminum profiles.

"The possibility of cutting rebates on aluminum products is very high. The best possible timing should be in the fourth quarter of this year," he said, declining to be identified due to the commercial sensitivity of the issue.

The manager said domestic demand for products such as profiles, used in building houses, has increased, making a case for a cut in the rebate.

In the first half of this year, China exported more than one million tonnes of semi-finished aluminum products, including profiles, bars, rods, plates, sheets and strips, up 91 percent from a year ago.


 

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tax policy tax adjustment
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VAT rebate policy VAT rebate policy

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