Starting December 1, 2024, China will cancel its 13% export tax rebate on aluminum and copper, a move that is expected to significantly impact the global market. Chinese companies, including Aluminum Corp. of China Ltd. and China Hongqiao Group Ltd., saw their stock prices fall by 5-10%, while international competitors saw an increase in their stock values.
Experts believe that this decision is part of China’s strategy to reduce excess production capacity in the metallurgical sector, which could help decrease the global surplus of aluminum. Specifically, the removal of the tax break will make Chinese aluminum more expensive on international markets, potentially reducing its exports and creating demand for products from other producers.
So far, the response to the copper market has been less significant, as China is not as dominant a supplier of copper as it is of aluminum. However, the increase in copper exports abroad this year suggests that we may see changes in the future.