Aluminum price soars as China cancels tax incentive on exports
The export tax rebate was also removed for copper and lowered for some refined oil, solar, battery and non-metallic mineral products.
Aluminum fell with other industrial metals as a lack of buying interest in top-consumer China dampens a recent price rally.
Futures for the commodity dropped as much as 1.2% to the lowest level in a week.
The LMEX Metals Index, which tracks the six main base metals, has also edged lower this week. The index earlier in March rose to the highest in almost eight months, with copper breaching $9,000 a ton for the first time in nearly a year. Investors had honed in on supply risks and bet on an improving global manufacturing outlook.
However, consumption has disappointed in China, where the usual pickup in spring activity hasn’t fully materialized. Buyers have been deterred by recent price gains, spot aluminum discounts are widening, and traders are dumping cargoes, Jinrui Futures Co. said in a research note.
There was some cheer to be had in China’s latest industrial profits data, which extended gains that began in August, although much of the strength could be attributed to the base effect of comparing to a weak 2023.
Aluminum traded 0.8% lower at $2,285 a ton on the London Metal Exchange by 3 p.m. local time. Other metals also fell, with zinc down 0.5% and copper declining 0.4%.
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