China May Cut Export Tax Rebates on Aluminum Products

China may lower export tax rebates on some aluminum products as the government continues to curb expansion in energy-intensive and pollution-prone industries.

The lower rebates would discourage exports and also reduce Chinese aluminum products' competitiveness in global markets, analysts said.

The Ministry of Finance is considering reducing the rebates on some aluminum extrusions, used in cars, houses and manufactured goods, to 9 percent from 13 percent, the China Securities Journal reported yesterday, citing unidentified sources.

China raised the tax rebates on semi-finished aluminum products in late 2008 and in 2009 to boost exports in the wake of the global financial crisis. China's aluminum product exports surged 56 percent to 2.18 million tons in 2010.

While high rebates helped aluminum exporters expand overseas, they also prompted countries, including the United States and Australia, to impose anti-dumping duties on products from China.

"It's only a matter of time for the government to cut or scrap export tax rebates on aluminum products," the Shanghai Metals Market said in a note, adding most Chinese aluminum exports are low-end products.