Trade body disappointed over China removal of aluminum export duty

Author: Paul Ploumis25 May 2015 Last updated at 08:43:51 GMT

RICHMOND (Scrap Monster): The Arlington, Virginia-based Aluminum Association has expressed its disappointment over Chinese withdrawal of export duties on alloy and non-alloyed aluminum bars and rods.

According to Aluminum Association, the removal of export duty is against the Chinese policy that calls for discouraging exports of energy-intensive products. The change in policy will escalate unfair trade practices in the global aluminum industry. It called upon the Chinese administration to adhere to global trade norms, thereby ensuring level-playing field for aluminum producers across the world. The Association also decided to keep close watch on the situation so that necessary steps of action may be taken at appropriate time.

The decision to waiver the export duty is likely to add further to the global glut of the metal. The removal of duties may boost shipments out of the country, thereby leading to price plunge. The new policy is intended to improve China’s domestic aluminum market by encouraging exports and limiting domestic over supply. However, this will lead to increased global aluminum supply. Incidentally, China is the largest aluminum producing country in the world.

While smelters elsewhere in the world are trying to cut capacities, China continues to add more aluminum capacities. As per estimates, the country’s exports of unwrought aluminum and aluminum products totaled 1.21 million metric tonnes during the first quarter of 2015. This is 43% higher when compared with the exports during the corresponding quarter last year.

Earlier, the statement issued by the Chinese Ministry of Finance (MoF) had announced its decision to scrap the 15% duty on exports of certain aluminum products.