Impact of Rebate Repeal on China's Aluminum Exports

China Aluminum

In November, China saw a significant spike in aluminum exports, triggered by the government's sudden cancellation of a 13% export tax rebate on aluminum fabricated products. According to data from China's General Administrator of Customs, the country exported a hefty 669,000 metric tonnes of unwrought aluminum and aluminum products. This figure marks a 37% increase compared to November last year and a 16% rise from the previous month of October.

Surge in Exports Due to Policy Change

The announcement on November 15 to end the rebate, effective December 1, propelled exporters to accelerate their shipments. This strategic move was aimed at maximizing profits before the new policy rendered some exporting activities unprofitable. The abrupt policy change prompted a rush among manufacturers and exporters to push out as much product as possible within the short window, significantly influencing trade flows.

Future Outlook: A Sharp Decline Expected

Market analysts predict a steep decline in China's aluminum exports starting December. Without the financial cushion of the export tax rebate, the cost dynamics of exporting aluminum products from China are expected to shift dramatically, potentially slowing down the country's aluminum export momentum. This anticipated drop will likely reshape global aluminum supply chains and could affect global aluminum prices.