China to Cut or Cancel Export Tax Rebates on Copper Products
By Interfax-China
06 Apr 2007 at 09:57 AM GMT-04:00
resourceinvestor.com
SHANGHAI (Interfax-China) -- China may reduce or cancel export tax rebates on copper products in the near future, an industry official told Interfax today.
A senior official with the China Nonferrous Metals Industry Association (CNMIA), who wished to remain anonymous, said that the government might reduce or cancel export tax rebates on copper products. The government's decision will depend on the amount of exports and China's trade surplus in March.
The CNMIA has lobbied the Central Government not to further reduce copper product export tax rebates, as the former tax rebate policy has already successfully reduced copper product exports (excluding copper tube) in the first two months of the year, according to the official.
China exported 70,756 tonnes of copper products January and February, down 9.7% from the previous year, according to the General Customs Administration.
China reduced copper product export tax rebates from 13% to 5% on Sept. 15, 2006.
Aluminium products are also to have their export tax rebates reduced or cancelled in near future, he said.
China exported 255,800 tonnes of aluminium products in the first two months of this year, up 104.6% from last year. The aluminium product export tax rebates currently range from 8% to 10%.
"The government is determined to curb China's huge trade surplus and reduce over-investment in some sectors by restraining exports. It is very likely that the government will release a new policy on export tax rebates to cover most nonferrous metal products at the end of April or in early May," the official claimed.
China's fixed-asset investment in the nonferrous metals industry grew by 56.4% in the first two months of this year, while the average growth rate in urban investment stood at 23.4% during this period, according to statistics released by the National Bureau of Statistics.
The government is also considering increasing the export tax for most primary nonferrous metal products, including refined copper and aluminium and nickel, if there is not a substantial reduction in exports after the imminent export tax rebate policy is released, he said.
The export tax on electrolytic aluminium was increased to 15% on Nov. 1, 2006 and that of refined copper increased to 10%.
Metal Tolling
In other news, the Ministry of Commerce (MOFCOM) announced today that China will cancel the import of copper concentrate as well as iron ore concentrate and bauxite, for the production of processed and finished product exports by the tolling sector on April 26.
MOFCOM has already cancelled tolling business imports for the majority of metal ores and concentrates, including iron ore concentrate, copper concentrate, bauxite, manganese ore concentrate, lead concentrate, zinc concentrate, tin concentrate, tungsten concentrate, nickel concentrate, gold concentrate, and silver concentrate.
The policy will cancel tolling exports of semi-finished or low-end metal products, including billets, refined copper, copper alloy, copper section, nickel alloy, non-alloy aluminium, refined lead and refined zinc (=99.99%), as well as ferroalloy products including ferromanganese, ferrosilicon and ferronickel.
Tolling is a practice of importing raw materials, and re-exporting the processed and finished products. During the tolling process, both imports and exports enjoy favourable tax policies, this both boosts the domestic economy and increase international trade.
In light of an increasing trade surplus and anti-dumping policies from other countries, the Chinese Government is attempting to reduce the export of low-value-added but high energy-consuming products.
According to the announcement, the policy will honour all tolling contracts approved before April 26.
Copper Prices
Shanghai copper futures settled higher on Friday at RMB 67,600 ($8,751) on speculative buying, after copper touched the highest level since late October of $7,510 per tonne on the London Metals Exchange overnight.
"Domestic prices ended higher and beyond our expectation. Open interest increased heavily today on speculative buying," analyst Pang Ying from Star Futures said.
Copper stockpiles closed the week 1,719 metric tonnes higher at 61,083 metric tonnes according to the Shanghai Futures Exchange.
© InterFax-China 2007. For more intelligence on Chinese metals and mining, click here or contact David Harman in Hong Kong at david.harman@interfax-news.com or (852) 2537-2262. |
