Impact of Export Tax Rebate Policy on Foshan Aluminum Doors and Windows: March 2025
As of March 2025, China’s export tax rebate policy continues to influence the aluminum industry, particularly the aluminum doors and windows sector in Foshan. Since its implementation in December 2024, the updated tax rebate policy has become a permanent fixture for the industry. It eliminated export tax rebates for aluminum and copper products, alongside some oils and fats, while reducing rebate rates for other products like photovoltaic modules and batteries. This article examines the ongoing impact of this policy on Foshan’s aluminum industry, including the short- and long-term effects on pricing, profitability, and export competitiveness.
1. Current Landscape for China’s Aluminum Export Policy
The aluminum industry plays a central role in China’s export market, with Foshan being a key hub for aluminum doors and windows. The policy adjustment targeted 24 aluminum product codes, including aluminum profiles, sheets, strips, and rods. These products accounted for almost all of China’s aluminum exports in 2024. According to customs data:
- In 2024, China exported approximately 516.6 million tons of aluminum products, generating $17.74 billion in revenue.
- From January to September 2024, the export volume of the affected aluminum products was 462 million tons, representing 99% of total aluminum exports and 15% of domestic aluminum consumption.
Comparison of Aluminum and Copper Export Impact
| Product | 2023 Export Volume (Million Tons) | 2024 Export Volume (Jan-Sep, Million Tons) | % of Domestic Consumption |
|---|---|---|---|
| Aluminum Products (24 Codes) | 516.6 | 462 | 15% |
| Copper Products (34 Codes) | 67.85 | 61.23 | 4% |
The higher share of domestic aluminum consumption tied to exports suggests that the rebate cancellation has a greater impact on aluminum prices than on copper. This is evident from market reactions following the policy announcement in November 2024:
- LME aluminum prices rose by 5.56% overnight, while Shanghai aluminum prices fell by 1.63%.
- LME copper prices dropped slightly by 0.21%, and Shanghai copper prices fell by 0.26%.
2. How the Rebate Cut Affects Short-Term Aluminum Pricing
With the tax rebate gone, aluminum manufacturers are facing a steep rise in production costs, tightening profit margins across the board. The following calculation illustrates the financial impact on aluminum processing companies:
- Base Price (SMM Spot Aluminum Price on Nov 15, 2024): RMB 20,850/ton
- Processing Fee: RMB 4,000/ton
- Tax Rebate: RMB 2,859/ton (13%)
- Total Revenue Before Policy Change: RMB 27,709/ton
After the rebate cancellation, manufacturers lose the RMB 2,859/ton rebate, reducing profitability significantly. For products like aluminum foil, sheets, and profiles, where current export profits range from RMB 233 to RMB 406/ton, the loss of rebates has turned many orders unprofitable.
Profitability Before and After Rebate Cancellation
| Product | Profit Before Rebate Cancellation (RMB/ton) | Profit After Rebate Cancellation (RMB/ton) |
|---|---|---|
| Aluminum Foil | 385 | -2,474 |
| Aluminum Sheets | 406 | -2,453 |
| Aluminum Profiles | 233 | -2,626 |
As a result, many manufacturers are renegotiating contracts with foreign buyers to share the increased costs. Until agreements are reached, export volumes are expected to decline further, creating downward pressure on domestic aluminum prices.
3. Future Profitability and Long-Term Market Implications
While the short-term impact of the rebate cancellation is largely negative, the long-term effects could create new opportunities. China is the largest global exporter of aluminum products, and reduced exports could create supply gaps in international markets. Key long-term effects include:
- Higher International Prices: Reduced Chinese exports may drive up global aluminum prices, improving profitability for exporters over time.
- Wider Price Gaps: A larger price gap between domestic and international markets could restore export competitiveness for Chinese manufacturers.
- Cost Redistribution: Overseas buyers may absorb some of the increased costs, easing the burden on Chinese exporters.
However, these outcomes depend on global supply dynamics, including the capacity of other aluminum-producing countries to fill the supply gap. Foshan’s manufacturers may also need to focus on higher-value products to maintain competitiveness in export markets.
Strategic Outlook for Foshan Aluminum Manufacturers
The export tax rebate policy adjustment continues to shape the aluminum industry in March 2025, with significant implications for Foshan’s aluminum doors and windows sector. The short-term effects include reduced export volumes, suppressed domestic prices, and profitability challenges for manufacturers. However, the long-term outlook offers potential opportunities as global markets adapt to the policy changes.
Manufacturers in Foshan must remain proactive, renegotiating contracts and exploring strategies to mitigate risks and capitalize on new opportunities. By focusing on innovation and value-added products, Foshan’s aluminum industry can navigate these challenges and secure a stronger position in the global market.