China aluminium sellers to focus on exporting alloys Japan in '07

Chinese aluminium producers and traders are expected to focus on alloys, sheet, extrusion and other processed products for exports to Japan in 2007, Japanese industry sources told Platts on Wednesday.

Tokyo based traders said aluminium ingot exports from China to Japan are expected to fall sharply in 2007 on the back of increased export tax costs. Chinese smelters, traders and Japan-based traders are considering trading aluminium alloy, sheet, extrusion and other processed products instead, they said.

The Chinese government raised the export tax of aluminium ingot to 15% from 5% effective November 1, 2006. Alloy, sheet, extrusion and other processed aluminium products were not affected by the tax hike, one Tokyo-based Chinese trader said. Another Tokyo-based Japanese trader also said his company was looking into expanding into processed aluminium products trade instead of ingot.

"We are currently studying how to ship aluminium out of China in non-ingot forms," the trader said.
Japan imposes import tariffs of at least 3% for rolled and aluminium products, but this tariff could be absorbed as aluminium processing costs in China are lower compared to Japan, sources said.

Japan imported 117,278 mt of aluminium ingot (99% purity or higher) from China in January to September of 2006. Imports from China accounted for 7.5% of the total metal imports during the period. Around 70-80% of Chinese imports are on contracts. Contracts either expire in December of this year or in March of 2007, traders said.