WTO Rejects Chinese Appeal on Zinc Export Restrictions

The World Trade Organization (WTO) issued a ruling against China's restriction of exports in nine mineral resources – bauxite, coke, fluorite, magnesium, manganese, silicon carbide, silicon metal, phosphorus and zinc – saying that the restrictions convey an unfair advantage to the country’s manufacturers. The ruling requires that China immediately reduce export tariffs and lift export quotas.

  China Zinc Export Tariffs 

China began to impose export tariffs on zinc ingot (Zn content 99.995%) in 2007, canceled the 50% export tax rebate on zinc ingot (Zn content＞99.995%) on August 1, 2007, and implemented an export licensing system in 2010 to 2011.

These policies reflect China’s determination in the overhaul of high-pollution, high-energy-consuming and resource-dependent industries. They play an important role in protecting domestic resources and promoting structural integration and upgrading of domestic zinc industry.

If the Chinese government reduces or eliminates export tariffs for zinc or cancels export license, export quotas, minimum export price requirement and other policies amid heavy pressures, domestic zinc market will be affected. Export policy and industrial structure adjustment are closely related, and once China looses policies concerning exports of resource products, it will be more difficult to control the blind expansion of domestic zinc smelters, and China will also face strong pressures from the completion of energy conservation and resource utilization tasks in nonferrous metal industry during the 12th Five-Year Plan period.

Therefore, SMM expects China to introduce policies accordingly to protect domestic resources and to ensure the healthy development of domestic industries.