Nonferrous Metals Industry Unlikely to Win Favor Despite High Voice for Raising Export Rebate Rate-Shanghai Metals Market

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Nonferrous Metals Industry Unlikely to Win Favor Despite High Voice for Raising Export Rebate Rate

SMM Insight 02:30:00PM Jan 16, 2013 Source:SMM

SHANGHAI, Jan. 16 (SMM) –

Macro Overview
Euro Zone Industrial Output Down for Three Consecutive Months in November
Eurostat data Monday showed that the euro zone's industrial output fell 0.3% MoM in November, in strong contrast with an increase of 0.2% expected by markets, and also down 3.7% YoY. The industrial output in this region dropped on a monthly basis for a third consecutive month in November.

According to data released by the research institute of the Centaline Group, newly-built housing units sold in 54 major Chinese cities soared to 104,800 units as of Januay 13, down 16% from 125,000 units seen in the first 13 days of December, but up 103% on a yearly basis. 

Industry Analysis
Shanghai Composite Index above 2,300, Investors Should Not Too Pessimistic over Base Metals
The Shanghai Composite Index increased above 2,300 Tuesday, so investors should not be too downbeat about base metals, despite a drag from LME copper. If Chinese stock markets can increase further, they may buoy investor confidence on China's economic outlook and help lift base metals. 
 
Industry Guidance
Nonferrous Metals Industry Unlikely to Win Favor Despite High Voice for Raising Export Rebate Rate
According to China Customs, China's import and export value totaled USD 3.86676 trillion in 2012, and the export value was USD 2.049835 trillion, up 7.9% YoY. China's export situation is not expected to improve notably in 2013.

The Ministry of Commerce suggested increasing export rebate rates in some fields.

Data revealed that both the volume and value of exports of unwrought aluminum, converted timber, raw silk, and motorcycle dropped in 2012. In this context, China Association of Automobile Manufactures and other institutions proposed to raise export rebate rates for some products.

Data of the Ministry of Finance showed that China's primary aluminum exports are levied with a 15% tariff and enjoy preferential tax rebate policies products are processed before exports. The export rebate rate for aluminum semi-finished products is 13%.

Overcapacity in China's aluminum industry is severe. With capacity and output in aluminum processing industry increasing rapidly, aluminum semis exports are also rising. It was disclosed that China will restrict exports of high energy consuming, high polluting and resource products. As energy and resources tighten, it will become an inevitable trend that the government will use tariff policies to control aluminum and other primary processing materials in the future. During this process, a lot of SMEs will be forced out of markets as their profits are squeezed, which will help adjust and upgrade industry structures.

Nevertheless, even if China raises export rebate rates in 2013, the nonferrous metals industry, high energy consuming, high polluting and resource industries, as well as industries with low added value are unlikely to gain favor.
 

Price

more
#1 Lead
Oct.24
16650.0
-50.0
(-0.30%)
#1 Lead - Guangdong
Oct.23
16725.0
-100.0
(-0.59%)
#1 Lead - Henan
Oct.23
16625.0
-125.0
(-0.75%)
#1 Lead -Tianjin
Oct.23
16675.0
-150.0
(-0.89%)
#2 Lead
Oct.24
16100.0
-50.0
(-0.31%)

Nonferrous Metals Industry Unlikely to Win Favor Despite High Voice for Raising Export Rebate Rate

SMM Insight 02:30:00PM Jan 16, 2013 Source:SMM

SHANGHAI, Jan. 16 (SMM) –

Macro Overview
Euro Zone Industrial Output Down for Three Consecutive Months in November
Eurostat data Monday showed that the euro zone's industrial output fell 0.3% MoM in November, in strong contrast with an increase of 0.2% expected by markets, and also down 3.7% YoY. The industrial output in this region dropped on a monthly basis for a third consecutive month in November.

According to data released by the research institute of the Centaline Group, newly-built housing units sold in 54 major Chinese cities soared to 104,800 units as of Januay 13, down 16% from 125,000 units seen in the first 13 days of December, but up 103% on a yearly basis. 

Industry Analysis
Shanghai Composite Index above 2,300, Investors Should Not Too Pessimistic over Base Metals
The Shanghai Composite Index increased above 2,300 Tuesday, so investors should not be too downbeat about base metals, despite a drag from LME copper. If Chinese stock markets can increase further, they may buoy investor confidence on China's economic outlook and help lift base metals. 
 
Industry Guidance
Nonferrous Metals Industry Unlikely to Win Favor Despite High Voice for Raising Export Rebate Rate
According to China Customs, China's import and export value totaled USD 3.86676 trillion in 2012, and the export value was USD 2.049835 trillion, up 7.9% YoY. China's export situation is not expected to improve notably in 2013.

The Ministry of Commerce suggested increasing export rebate rates in some fields.

Data revealed that both the volume and value of exports of unwrought aluminum, converted timber, raw silk, and motorcycle dropped in 2012. In this context, China Association of Automobile Manufactures and other institutions proposed to raise export rebate rates for some products.

Data of the Ministry of Finance showed that China's primary aluminum exports are levied with a 15% tariff and enjoy preferential tax rebate policies products are processed before exports. The export rebate rate for aluminum semi-finished products is 13%.

Overcapacity in China's aluminum industry is severe. With capacity and output in aluminum processing industry increasing rapidly, aluminum semis exports are also rising. It was disclosed that China will restrict exports of high energy consuming, high polluting and resource products. As energy and resources tighten, it will become an inevitable trend that the government will use tariff policies to control aluminum and other primary processing materials in the future. During this process, a lot of SMEs will be forced out of markets as their profits are squeezed, which will help adjust and upgrade industry structures.

Nevertheless, even if China raises export rebate rates in 2013, the nonferrous metals industry, high energy consuming, high polluting and resource industries, as well as industries with low added value are unlikely to gain favor.