China’s Ministry of Finance is to cancel export tax rebates for aluminium products from 1 December this year.

The policy, announced on 15 November, eliminates a 13% rebate previously applied to exports, raising costs for international buyers of Chinese aluminium.

Importers heavily reliant on Chinese aluminium face potential cost hikes and supply chain disruptions. The policy shift is expected to encourage importers to seek alternative suppliers or renegotiate terms to manage expenses.

Following the announcement last week, aluminium futures on the London Metal Exchange increased by up to 8.5%, reflecting market concerns over reduced Chinese exports.

China is the world’s largest aluminium producer and accounted for more than half of global production in 2023. The US, Mexico and Japan were the most reliant on aluminium imports from China in 2023 at 10.8%, 5.89% and 5.49% respectively, according to the UN Comtrade database.