Metals News
Export tax cut by China to cause market imbalance, warns US Aluminum body
industry news
Sep 10,2015

By  Paul Ploumis 10 Sep 2015  Last updated at 03:43:11 GMT

The abolition of 15% tax on exported primary aluminum by China may tilt the balance of global aluminum trade.

ALBANY (Scrap Monster): The Arlington, Va.-based Aluminum Association has raised serious concerns over Chinese plans to drop the export tax on primary aluminum. It must be noted that the Chinese Non-Ferrous Metals Industry Association had recently urged relevant authorities to consider dropping the 15% tax imposed on primary aluminum exports out of China. According to the US Aluminum Association, any such decision is likely to negatively impact global aluminum market balance.

The Association noted that China had implanted the tax structure as part of its attempts to achieve self-sustainability goals by discouraging exports of energy-intensive products. Removal of tax will boost growth of carbon-intensive smelters, thereby leading to increased greenhouse gas emissions. According to estimates, aluminum smelters account for nearly 5% of the total CO2 emissions by China. On the contrary, carbon footprint by North American aluminum making facilities has dropped significantly by nearly 40% since 1995.

The Association also expressed deep concerns over the huge jump in Chinese share of imported aluminum into the country. As per data, the imports of semi-fabricated aluminum products from China witnessed a jump of nearly 115% from 2012 through 2014. During this period, the Chinese market share has almost doubled from nearly 14% to 28%. The imports through June this year suggests 75% year-on-year growth to 675 million lb. The market share of Chinese semis surged to 36% during Jan-June ’15.

The US Aluminum industry provides nearly 11,000 jobs and contributes $6 billion in economic output. The removal of export tax on primary aluminum by Chinese authorities may have negative impact on US domestic aluminum industry, the Association observed.

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