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Art
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China's exports of tin, zinc to fall on new taxes
(Reuters)
Updated: 2008-01-10 14:02
Counter:380
China's exports of refined tin and low-grade refined zinc may fall due to new taxes, industry officials said on Wednesday.
Fewer exports from China, the world's top producer of tin and a major zinc supplier, could reduce global supply and support prices.
China imposed a 10 percent tax on exports of primary refined tin from Jan 1, indicating Beijing's determination to leave more metal at home for its electronics, chemicals and steel sectors.
The new tax, equal to about US$1,600 per tonne, is putting a break on refined tin outflows, which rose 28.5 percent on the year to 22,126 tonnes in the first 11 months of last year as exporters cashed in record high prices.
World tin prices hit a contract high of $17,575 a tonne in November due to worries over supply from Indonesia, the world's second-biggest tin producer. It traded at $16,450 on Wednesday.
"We will export tin products to clients. If they want refined tin ingots, we cannot help them," said a trade manager at Yunnan Tin Co Ltd , the top producer in China.
Yunnan Tin exported more than 10,000 tonnes of refined tin ingots in 2007 and did not plan to export the primary metal this year, the manager said.
But it would increase exports of chemical products made from tin as they were subject to a 5 percent tax rebate and did not carry an export tax, he said.
"Prices for Chinese tin should be rising," a senior manager at a soldering tin plant in Guangxi said, referring to exports.
He said refined tin imports might fall as more metal would stay at home.
China has kept a 3 percent tariff on imports of refined tin, which dropped 22 percent on the year to 11,852 tonnes in the 11 months of last year.
Beijing in January also imposed a 5 percent tax on exports of unwrought refined zinc with purity of less than 99.995 percent, known as high-grade zinc and number one grade in China, and a 15 percent tax on zinc with purity of less than 99.99 percent, known as number two to five grades.
But it has left a duty-free policy on exports of super-high grade zinc, known as number zero grade in China which is the most popular type in international markets, and has maintained a 5 percent tax rebate on the exports.
But zinc smelters were unwilling to commit exports for 2008 even for super-high grade zinc as they were worried that Beijing would change the taxes any time, said an international trade manager at Zhuye Torch , China's top producer of zinc, which is used in steel and battery sectors.
"Exports should not be over 130,000 tonnes this year," he predicted, comparing to 263,900 tonnes in January-November 2007.
****My uninformed opinion only...do your own due diligence****
