China eases Iran war aluminium shock, but at a cost: Andy Home
XLB•Export flows are shaped by tax policy
MIND THE TAX GAP
The composition of China's aluminium export flows is determined primarily by tax code. Primary metal attracts a hefty 30% export tax, while both alloy and semis can exit the country at a zero tax rate.
It should come as no surprise, then, that most of China's current outbound volumes are in the form of alloy and products such as bar, rod and tube.
That's not to say that exports of primary metal haven't also responded. First-half volumes rose by 32% year-on-year to 38,400 metric tons, but most of this metal is likely Western aluminium stored in bonded warehouses and now being rerouted to Western markets.
For example, China "exported" 9,700 tons to the U.S. in January-June but U.S. customs counted only 70 tons of Chinese imports over the same time frame.
Exports of alloy are growing faster, nearly doubling to 238,500 tons in the first six months of 2026. Indeed, China turned into a net exporter of alloy in June for the first time since 2019.
