SHANGHAI, Dec. 9 (CBI China) -- The source revealed that in the near future, China may cancel export tariffs on primary aluminum by 15% to help the refining businesses getting through the winter, while last week there was news that the Government will reduce export tariffs on primary aluminum to 5%.
China export tariffs cut will help increase exports and decline international aluminum prices. China is the world's largest primary aluminum production and consumption country.
Because of the sensitivity of the information, a large aluminum smelter who is reluctant to reveal private information said, "We are told that government plans to cancel export tariffs on primary aluminum by 15%."
Many aluminum smelters including CHALCO cut production and laid off workers due to weak domestic demand and sharp drop in export orders of aluminum products, so that domestic economic growth experiencing sharp drop has doubled the pressure.
Smelters and traders said last week the Beijing government considered reducing export tariffs to 5%.
One analyst who is familiar with the government said, "attitude of the government has changed, to save the real economy is the top priority."
He said, "government is likely to abolish export tariffs on primary aluminum in January next year, the export tax rebate policy announcement may take some time to consider."
He added that the Government has not issued an official document to control energy-intensive aluminum industry.
A trader in Hong Kong said, "If export tariffs are cancelled, LME aluminum prices will reach USD 1200/mt."
On Thursday three-month LME Aluminum was USD 1604/mt, fell more than 50% from high point in July.
Primary aluminum inventories in China are expected to be 1.1 million tons, accounting for about 1 / 3 of primary aluminum production in China. The source said that if domestic demand continued to be weak, domestic stocks will be flowing into the LME warehouses.
(Edited by CBI China)