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.
Zinc traded close to a one-year high as metals markets looked past delays to US monetary easing to focus on looming supply risks.
Prices for the metal have rallied more than 13% over the past two weeks amid the threat of reduced output from refiners facing lower profits for processing it. Zinc smelters have been hit by a sharp reduction in the fees they charge to turn mined ore into finished metal, and analysts say more cuts could be coming as they compete for less work from miners struggling to boost output.
The lack of available concentrate and lower refining charges have supported zinc’s rally, said John Meyer, a partner at SP Angel Corporate Finance LLP. “It goes to show there is a scarcity of raw material around,” he said.
But unlike copper, which has been the subject of bullish calls due to its applications in electric vehicles and renewables, further gains in zinc may by limited because it’s more closely linked with the real estate sector.
“As long as the Chinese property market in particular, the main consumer of steel, shows no signs of recovery, demand for zinc is likely to remain subdued,” Thu Lan Nguyen, head of commodity research at Commerzbank AG, wrote in a note.
Zinc was up 0.07% to $2,737.50 on the London Metal Exchange at 3:36 p.m. London time, after pulling back from Wednesday’s peak of $2,795 in the wake of a hotter-than-expected US inflation report. Copper was steady near a 15-month high hit earlier this week. Aluminum rose by 0.2%, while nickel was down 3.7%.
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