China may resume export tax rebate for aluminum extrusion as part of new export program

According to Hong Kong's November 13 news, industry sources said on Thursday that China may resume export tax rebates for extruded aluminum widely used in the construction industry as part of its latest plan to increase exports.

To stimulate economic growth, the State Department of China said on Wednesday that it will increase export tax rebates for more than 3,770 products from December onwards. This is the second batch of products with higher export tax rebates in less than a month, accounting for about 27.9 of all export products. %.

Up to now, the government has not announced the detailed catalogue of these products, but the scope includes the export tax rebates for some labor-intensive products, mechanical and electrical products and other products that are affected.

Since 2007, China has eliminated the export tax rebate for extruded aluminum, which is part of the policy of restraining the resource-intensive aluminum industry for many years. The cancellation of export tax rebates led to a reduction in exports from hundreds of factories in Guangdong Province. Many of the factories currently face closures and layoffs due to high costs. Similarly, export reductions reduce the domestic demand for primary aluminum.

An aluminum plant manager in Nanhai City, Guangdong Province, stated that “aluminum extrusion will resume export tax rebates and the tax rate may be 5-8%.” He added that aluminum rod exports may also have a 5% export tax rebate.

However, insiders said that the new export tax rebate is unlikely to promote the export of aluminum profiles and rods in the next few months because of the weak global demand due to the global financial crisis and economic recession concerns.

A manager of a large aluminum smelter under the International Trading Bank stated that exports need overseas demand. There is no such demand. It also expects that exports of aluminum products will remain sluggish in the first quarter of next year.

An international trading company and trader stated that “the demand is completely silent. People do not want to export at the risk of repaying the loan.”

In the first nine months of this year, China’s exports of aluminum products only increased by 4.5% over the same period of last year, and in 2007, they rose by as much as 50%.

The Chinese government may also increase copper export tax rebates from December onwards, with a tax rate of 5-13%, depending on the degree of difficulty in production.