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Fear Overdone over China Aluminum Semis Export Rebate Removal, SMM Reports
Apr 19,2016 08:45CST
smm insight
Source:SMM
It is worried that China will cancel export rebate on aluminum semis as well after its recent decision to remove export rebate on seven industries.

SHANGHAI, Apr. 19 (SMM) –It is worried that China will cancel export rebate on aluminum semis as well after its recent decision to remove export rebate on seven industries. 

SMM deems such concerns as overdone and sees little possibility for China to do so for the foreseeable future, citing three reasons. 

Currently, China offers 13% rebate on exports of aluminum extrusion, plate/sheet, strip and pipe/tube, as well as 15% rebate on aluminum foil exports. Chinese aluminum semis exporters need to pay 17% VAT. That is to say, they are still subject to 2%-4% tax even after the rebate. SMM learns that export profit margins at most Chinese aluminum processors are less than 10% after counting in export rebate. Should the rebate be abolished, Chinese exporters will suffer losses or report meager profit.    

Besides, removal of export rebate will deal a heavy blow to export activities, which totaled 4.19 million tonnes in 2015 and accounted for 9% of the country’s total output. This in turn will lead to severe oversupply in domestic market. 

In fact, China raised export rebate and cut export duty on deeply-processed aluminum products during 2009, 2014 and 2015. Cancelling the rebate will run against the central government’s longstanding intention of encouraging exports of such products. 

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