Chinese smelters are calling on the government to cancel its export tax on primary aluminium, as they seek to benefit from the supply deficit in the global market.

“Aluminium represents modern civilization, and is definitely not an industry that is pollution-creating or highly resource-consuming. Therefore, smelters are jointly calling on the government to cancel the export tax on aluminium ingots, and let market forces play a decisive role in the economy,” Liu Xiangmin, senior deputy president of Chalco, said at China Aluminium conference this week in Yunnan.

China currently levies a 15% export tax on aluminium ingots, but rebates of up to 13% exist on aluminium products.

The high export tax has set the Chinese primary aluminium market apart at a time when global prices and premiums are rising.

Although a number of major state-owned and private smelters are backing the call, many doubt the government will heed it.

“This is just not possible, as this is against China’s industrial policy (on aluminium). If it did happen, many small, outdated mills would come back to life,” a major dealer said.

Beijing has been making efforts to wipe out overcapacity and outdated aluminium smelting capacity in the past few years. The country is expected to shut down around 2.96 million tpy of smelting capacity this year, according to Antaike.