China's Customs Tariff Commission of the State Council recently issued a circular to increase the export tariffs on aluminum and coal products.

    According to the circular, the tariff rate on export of aluminumalloy (tariff No. 76012000) conducted in general trade will be raised to 15 percent since August 20, 2008.

    Data showed that the net export of aluminum alloy soared from 30,000 tons in January to 100,000 tons in June. This led the government to take measures to rein in the fast growth of aluminum industry, the high energy-consuming sector.

    Experts held that this policy would drive aluminum alloy's domestic price down, but at a limited pace, because the domestic price was already close to the cost, and the export of aluminum equals to 10 percent of the domestic supply, the increase of tariff rate might have impact on its supply in domestic market.

    The circular stipulated that the tariff rate on export of coke would be raised to 40 percent from 25 percent, and that of coking coal to 10 percent from five percent. The tariff rate for other types of bituminous coal will be ten percent since August 20, 2008.

    This move had limited influence on domestic coke market, according to analysts. The export of coke and semi-coke reached 8.27 million tons in January-July, down 8.3 percent from a year ago, and the export shifted to the domestic sales will not be in large amount.

    Analysts held that this policy would have huge impact on the international market. China's export of coke accounts for half of the world trade volume. The tariff rate increase will drive coke's export price up to 887.5 US dollars/ton from 710 dollars/ton.