By Jiang Wei (China Daily)
Updated: 2007-07-20 09:03

The Chinese government will further restrict exports of highly polluting resource products by adjusting tariffs on aluminum and aluminum products.

The Ministry of Finance yesterday said on its website it will suspend import tariffs on primary aluminum and will impose a 15 percent preliminary tariff on exports of rods and bars made from primary aluminum. The new tariff rates will take effect on August 1. The import tariff on primary aluminum is currently 5 percent.

"The moves are targeted to further restrict export of energy-intensive, highly polluting resource products and to encourage import of raw materials," the ministry said.

The removal of the import tariff is unlikely to lead to a big increase in China's aluminum imports, said Wang Feihong, an aluminum analyst with Beijing-based metal industry consultancy Antaike Information Development Co Ltd.

He said the aluminum price on the international market is about $2,800 per ton compared with $2,630 per ton in China, and the domestic supply is enough to meet the demand in the country.

"But it indicates the Chinese government's attitude of encouraging imports of raw materials."

Wang said the new export tariff on rods and bars made from primary aluminum is expected to "restrain the exports in certain categories of low-value-added aluminum products".

China imposed a 5 percent tariff on aluminum ingot exports at the beginning of last year. In November, the tariff was raised to 15 percent.

The moves were all part of the drive to conserve energy to ensure sustainable development. Aluminum is among the industries that consume the most electricity and resources.

Many aluminum companies have aggressively expanded production capacity, encouraged by high prices in previous years and tumbling costs of alumina, the raw material used to make the metal.