Cancellation of Copper Pipe & Tube Export Tax Rebate! How Should Enterprises Respond? [SMM Analysis]

According to customs data, copper pipe & tube imports in October 2024 were 1,260.6 mt, down 34.7% MoM, up 28.2% YoY; cumulative imports from January to October were 17,466.5 mt, up 42.5% YoY.

In October, copper pipe & tube exports were 31,054 mt, up 12.1% MoM, up 27.7% YoY; cumulative exports from January to October were 308,827.3 mt, up 14.7% YoY.

In October, the operating rate of domestic copper pipe & tube enterprises increased, mainly due to the continued strong production schedule for air conditioners for both domestic sales and exports, with YoY high growth leading to better-than-expected orders for air conditioner pipes; however, import demand returned to normal levels. Notably, the top three import sources in October were Iran (27%), Japan (20%), and Thailand (20%); Iran's share has significantly increased over the past three months, while Thailand's share has decreased. There were no significant changes in the share of export destinations, but considering the overseas Christmas holiday in December, export volumes in October and November are expected to remain high.

On November 15, 2024, the Ministry of Finance and the State Administration of Taxation issued Announcement No. 15 of 2024, stating the following adjustments to the export tax rebate policy for products such as aluminum semis: 1. The export tax rebate for aluminum semis, copper semis, and chemically modified animal, vegetable, or microbial oils and fats is canceled. 2. The export tax rebate rate for some refined oil products, PV, batteries, and some non-metallic mineral products is reduced from 13% to 9%. 3. This announcement will take effect on December 1, 2024. The applicable export tax rebate rate for the products listed in this announcement will be determined by the export date indicated on the export goods declaration form.

According to SMM compilation of public documents, the following copper pipe & tube products are related:

SMM analysis of China's copper pipe & tube export trade modes from January to October 2024 found that Ordinary Trade accounted for 48.09%, Processing with Imported Materials accounted for 44.48%, and other trade modes accounted for relatively small proportions. After the implementation of this policy, copper pipe & tube export volumes in November may increase more than expected, achieving high YoY and MoM growth, with some enterprises possibly locking in orders for export before December 1.

Entering 2025, domestic copper pipe & tube enterprises with export plans may consider the "Processing Trade with Supplied Materials" more, and the proportion of copper cathode purchased externally is expected to increase in 2025.