China's Ministry of Finance has announced new taxes on aluminium
by David Fleschen
China's Ministry of Finance has announced that it will impose a 30% tax on exports of primary aluminium and 15% on exports of refined low-alkali aluminium alloys from 2023. The move is aimed at the "modernisation and high-quality development" of the aluminium industry. At the same time, it is also in line with the government's climate goals. This is because the export tax is likely to make the extremely energy-intensive production of aluminium less attractive. Recently, Europe in particular has been a beneficiary of China's robust aluminium production.
According to the commodity information service Platts, 43.3% of China's aluminium exports went to Europe in the period from January to November last year. This is probably partly a consequence of the fact that the European aluminium industry was forced to significantly reduce its production due to increased energy costs, which meant that demand had to be met by increased imports. It is questionable to what extent production in Europe will be able to recover in view of what are probably still difficult market conditions. Against this background, the Chinese export tax threatens to drive up premiums in Europe.
Source: Commerzbank Research, Photo: Fotolia