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[Bloomberg] China's Ports Cut Benefits to Curb Aluminum Exports
Contact nowMarch 6 (Bloomberg) -- China, the world's biggest producer
of aluminum, may further curb export sales of some tube products
to rein in overcapacity, research company CBI China Co. said.
Several Chinese ports have halted the granting of export
tax benefits to low value-added aluminum tubes this month, Eric
Zhang, an analyst, said in a phone interview from Shanghai today.
He said more ports may follow suit, without naming any.
The move may cut exports of aluminum tubes, which jumped
more than tenfold in January from a year ago, and boost global
prices. Aluminum, used in auto parts and packaging, surged 34
percent this year on the London Metal Exchange as power outages
in China and South Africa cut supplies.
``We estimate there's going to be more than 40,000 tons of
aluminum a month'' that won't be exported should all ports in
the country halt export benefits, Zhang said. ``This is bullish
for the LME yet seriously bearish for the domestic market.''
China removed tax rebates on aluminum rods and bars in July
2007 as part of a wider measure to curb a record trade surplus
and overcapacity in energy-intensive industries. Electricity
accounts for between 30 percent and 40 percent of the costs of
making aluminum.
Disguised Exportsof aluminum, may further curb export sales of some tube products
to rein in overcapacity, research company CBI China Co. said.
Several Chinese ports have halted the granting of export
tax benefits to low value-added aluminum tubes this month, Eric
Zhang, an analyst, said in a phone interview from Shanghai today.
He said more ports may follow suit, without naming any.
The move may cut exports of aluminum tubes, which jumped
more than tenfold in January from a year ago, and boost global
prices. Aluminum, used in auto parts and packaging, surged 34
percent this year on the London Metal Exchange as power outages
in China and South Africa cut supplies.
``We estimate there's going to be more than 40,000 tons of
aluminum a month'' that won't be exported should all ports in
the country halt export benefits, Zhang said. ``This is bullish
for the LME yet seriously bearish for the domestic market.''
China removed tax rebates on aluminum rods and bars in July
2007 as part of a wider measure to curb a record trade surplus
and overcapacity in energy-intensive industries. Electricity
accounts for between 30 percent and 40 percent of the costs of
making aluminum.
Tube products, which still enjoy a 13 percent tax rebate,
replaced rods and bars as a ``disguised form'' for Chinese
manufacturers to sell overseas after the July change, Zhang said.
China is ``not yet considering'' export tax changes on all
tubes, and is likely to target low value-added products, Wen
Xianjun, director of aluminum division of the China Nonferrous
Metals Industry Association, said by phone from Beijing today.
The association advises the government on policies.
China exported 160,000 tons of aluminum products in January,
down 6.9 percent from the prior month, according to customs data.
Exports of aluminum tubes were 52,470 tons in January, up
2.6 percent from the prior month, according to CBI's Zhang.
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