Spot aluminium premiums surge on possible China tax Sunday, 05 Apr 2009 Mining Journal reported that premiums for spot aluminium to China have risen more than 25% in the past week, reflecting increased demand by Chinese merchants and fabricators in anticipation of tax changes as early as May.
In February China, the world's top producer and consumer of aluminium, considered reinstating a 5% tax on imports of primary aluminium to protect Chinese smelters but decided to hold off for a few months to avoid accusations of protectionism from its trading partners. But imports are expected to surge in March and April, which may spur Beijing to put in place the tax as early as May to cut inflows.
UBS Securities said in a research report that the State Council, China's cabinet, approved a proposal to impose an import duty on non-ferrous metals including aluminium in late March, though the rate of the duty has not been disclosed.
A trader at an international trading house said "People have gone crazy. We received so many phone calls asking for April shipments. They said they wanted to buy regardless of premiums. The traders said but they are not too keen to take shipments from May and onwards as the tax may change."
Primary aluminium ingots for arrival in the next two weeks traded at USD 150 per tonne to USD 160 per tonne over cash prices on the London Metal Exchange for delivery to Hong Kong, or USD 180 to USD 190 to China.
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