China’s 10% duty levied on refined tin exports has not been referenced in the country’s recently released 2017 Exports Commodities Tax Rates Table, leading many experts to conclude that the duty has been scrapped altogether, although no official announcement has yet been made to this effect.
ITRI China has contacted a number of companies, including brokers, producers and other experts, in an attempt to verify the cancellation of the duty. Whilst most believe it has been scrapped, no one has been able to verify this with 100% certainty because of the absence of any official announcement or documentation. ITRI’s view is that the duty has been cancelled, but we suspect the situation may not become any clearer until after China’s Spring Festival.
China started to impose the 10% export duty on refined tin from 2008. It has since changed China from a net exporter to a net importer, also helped by the increasing demand for refined tin within China. Any change to the duty would be in the context of the ongoing World Trade Organisation (WTO) challenges to China’s export duties on tin and other raw materials. These were launched separately by the USA and EU in July last year, who both argued that they were anticompetitive. Chinese representatives have rejected the challenges, arguing that the duties were in line with WTO rules and designed protect the environment.
ITRI View: We expect that the removal of this barrier to trade will have global significance, as more tin ingot might be expected to flow into the international market, particularly given the substantial oversupply in China’s tin market in recent years. With the freer trade, a closer alignment between the LME price and China domestic tin price is also to be expected, due to increased opportunities for arbitrage trading.
Update: ITRI China has since received confirmation of the non-renewal of the duty from the China Non-Ferrous Metal Industry Association.