China's aluminium surplus chips away at global deficit
Surging mainland exports buoyed by overcapacity of smelters and tax rebates look set to counter world shortage as markets start to converge
China's exports of aluminium products have continued to surge, a trend that if continued may push the rest of the world toward a surplus.
China's exports of primary, alloy and semi-finished aluminium grew by around 43 per cent in the first quarter over the same period last year, according to preliminary customs data released this week.
While the initial data release does not provide the detailed breakdown, figures for January and February show that the overwhelming share is semi-finished products, such as bars, rods, wire, plates, sheet and foil.
In the first two months of the year, exports in this category, commonly known as semis, surged 91 per cent to 770,000 tonnes, a trend that will almost certainly be continued when the detailed March figures are released later this month.
Exports of semis have surged because they get a 13 per cent value-added tax rebate that largely offsets the 15 per cent export tax on aluminium.
The tax rebate does not apply to exports of primary aluminium, but it is a common view in the market that much of China's exports of semis is melted down and re-fabricated by importers.