MARKET OUTLOOK - Removal of Refunds May Raise Global Costs of Chinese Aluminum

Foreks - ING analysts have reported that China's cancellation of export tax reductions on products such as aluminum and copper could lead to a shift in trade dynamics and force countries dependent on Chinese aluminum to seek alternatives amidst limited global production capacity. The Chinese Ministry of Finance announced on Friday that it would reduce or eliminate export tax refunds for a wide range of commodities and other products, effective December 1. Accordingly, China will cancel tax refunds for aluminum and copper products. ING analysts anticipate that the removal of refunds will lead to an increase in the global cost of Chinese aluminum and a decrease in export volumes in the near term. The analysts stated in a note, "The global aluminum market is expected to turn into a deficit starting from 2026." China, the world's largest aluminum producer, introduced export tax refunds in 1985 to enhance the global competitiveness of its products and attract global buyers.