On November 15, 2024, China adjusted its export tax rebate policy, including canceling export tax rebates for aluminum, copper, photovoltaics, batteries and some non-metallic mineral products. It will be implemented from December 1, 2024.
As one of the aluminum products industries, there are 24 aluminum codes that have been canceled for export tax rebates, which almost cover the main domestic aluminum profiles, aluminum sheets, strips and foils, aluminum bars and other aluminum products. The cancellation of aluminum export tax rebates will directly increase the export costs of aluminum companies, which may cause a reduction in China’s aluminum product exports and raise foreign aluminum prices.
“Cancellation Of Export Tax Rebates” On Chinese Aluminum Products Companies
In the short term, China will cancel the export tax rebate for aluminum products, which will increase the export costs of Chinese aluminum processing enterprises, weaken the export enthusiasm of domestic companies, increase domestic aluminum supply, reduce domestic aluminum prices, but increase overseas aluminum prices overall.
Tax rebates cancellation includes 94% of China’s aluminum exports, which is a wide range. In the short term, domestic aluminum supply prices are under huge pressure.
Specifically, exports of aluminum sheets/strips, aluminum foil, and aluminum bars and profiles will all suffer big losses. Chinese aluminum export companies must increase processing fees to avoid losses.
| Cancellation of Tax Refund Aluminum Material List | |||
| Product Code | Product Name | Export volume in the first three quarters （ton） | VAT refund rate before adjustment% |
| 76042100 | Aluminum alloy hollow profiles | 440,310 | 13.0 |
| 760429101 | Columnar solid aluminum alloy (the ultimate tensile strength at 293K (20 degrees Celsius) can reach 460 MPa (0.46×10^9 Newton/square meter) or greater) | – | 13.0 |
| 76042990 | Other aluminum alloy profiles and special-shaped profiles | 308,879 | 13.0 |
| 76061121 | Aluminum-plastic composite non-alloy aluminum rectangular plates, sheets and strips, 0.30mm≤thickness≤0.36mm | 5,299 | 13.0 |
| 76061129 | Other non-alloy aluminum rectangular plates, sheets and strips, 0.30mm≤thickness≤0.36mm | 18,352 | 13.0 |
| 76061191 | Other aluminum-plastic composite non-alloy aluminum rectangular plates and sheets, thickness> 0.2mm | 46,401 | 13.0 |
| 76061199 | Other non-alloy aluminum rectangular plates and sheets, thickness＞0.2mm | 277,182 | 13.0 |
| 76061220 | Aluminum alloy rectangular plate, sheet, 0.2mm＜thickness＜0.28mm | 935,679 | 13.0 |
| 76061230 | Aluminum alloy rectangular plates and sheets, 0.28mm≤thickness≤0.35mm | 98,219 | 13.0 |
| 76061251 | Aluminum alloy rectangular plates and sheets of aluminum-plastic composite, 0.35mm＜thickness≤4mm | 216,221 | 13.0 |
| 76061259 | Other aluminum alloy rectangular plates and sheets, 0.35mm＜thickness≤4mm | 579,762 | 13.0 |
| 76061290 | Aluminum alloy rectangular plates and sheets, thickness ＞4mm | 247,806 | 13.0 |
| 76069100 | Other non-alloy aluminum plates, sheets and strips, thickness > 0.2mm | 43,447 | 13.0 |
| 76069200 | Other aluminum alloy plates, sheets and strips, thickness＞0.2mm | 68,487 | 13.0 |
| 76071110 | Unprocessed aluminum foil without backing after rolling, thickness ≤ 0.007mm | 238,571 | 13.0 |
| 76071120 | Unprocessed aluminum foil without backing after rolling, 0.007mm＜thickness≤0.01mm | 47,443 | 13.0 |
| 76071190 | Unprocessed aluminum foil without backing after rolling, 0.01mm＜thickness≤0.2mm | 442,709 | 13.0 |
| 76071900 | Other unbacked aluminum foil | 221,202 | 13.0 |
| 76072000 | Aluminum foil backing | 196,837 | 13.0 |
| 76081000 | Non-alloy aluminum tube | 14,467 | 13.0 |
| 76082010 | Aluminum alloy tube, outer diameter ≤ 10cm | 83,904 | 13.0 |
| 76082091 | Aluminum alloy tube, wall thickness ≤ 25mm, outer diameter ＞10cm | 6,789 | 13.0 |
| 76082099 | Aluminum alloy tube, wall thickness>25mm, outer diameter>10cm | 3,295 | 13.0 |
| 76090000 | Aluminum pipe accessories (e.g., fittings, elbows, sleeves) | 26,827 | 13.0 |
| Note: China’s HS code is 10 digits, of which the first 8 are called the main code and the last two are called the additional code. Among them, the main code of HS 7604291010 is HS 76042910. In the first three quarters, China exported a total of 51,701 tons of aluminum alloy bars and rods (HS 76042910). | |||
“Cancellation Of Export Tax Rebates” On Import Aluminum Company
Tax rebate cancellation has led to an increase in the cost of aluminum products exported from China, and foreign importers have to pay higher prices for Chinese aluminum products. Foreign companies will also look for new suppliers.
Aluminium prices surged over the weekend after China announced it would remove tax rebates on aluminium exports, driving aluminium manufacturers’ shares higher on Monday. National Aluminium Corp. of India rose 8.6 per cent, Hindalco rose 3.8 per cent and Vedanta Corp. rose 3.2 per cent. Aluminium prices rose more than 2 per cent in the Multi Commodity Exchange (MCX) spot market.
What can foreign importers do before the Chinese government cancels the aluminum tax rebate policy?
As a professional aluminum product manufacturer, I suggest that foreign companies stock up and increase purchases before the tax rebate policy is cancelled. Increasing inventory can help companies cope with rising costs.
Or negotiate more favorable prices with your trusted Chinese suppliers and share the additional costs of tax rebates. You can also allocate part of your orders to countries or regions with lower tax rates to optimize import costs. Although the tax rebate for aluminum raw materials has been cancelled, you can process aluminum products into higher value-added finished products or semi-finished products in China and then export them, because some high value-added products may enjoy lower taxes.
You can consult FTZ and take advantage of the preferential policies of the free trade zone, such as delayed payment of tariffs or tax exemptions.
How To Import Aluminium After Cancelling Tax Rebate
China will officially implement the policy of canceling tax rebates for aluminum products from December 1, 2024. As a customer, how should you reduce import costs?
If you don’t want to change your Chinese partner, you’d better renegotiate the price with him and strive for a more competitive ex-factory price and discounts by signing a long-term cooperation agreement. Or you can choose to take advantage of China’s processing trade preferential policies and import aluminum into the bonded area for processing before exporting. This method may enjoy tax exemption or delayed tax payment. Or you can directly import high-value-added aluminum products (finished products or semi-finished products) from China to avoid the impact of aluminum tax refund on raw material imports.
If you don’t want to import from China, you need to find aluminum producers again, such as India, Vietnam, Malaysia, etc. You may not know the new supplier well, so you need to purchase from multiple regions to spread the risk. However, if your company’s country has signed a free trade agreement with other countries (such as RCEP, USMCA, etc.), you can choose to import from that country because it will enjoy lower tariffs or 0 tariffs.
Another way is to shift your aluminum raw material import demand to end products, such as aluminum parts or structural parts, or choose other metals to reduce your dependence on aluminum.