Known for shrewd diplomatic moves, China is exploiting the Russia-Ukraine situation and increasing its aluminium exports which outstrips its imports manifold and these new dynamics have spurred criticism by both the United States and Europe.
The Russian invasion of Ukraine has flipped the global aluminium market. It is transforming China into an exporter. It is interesting to note that all of this is playing out as metal flow to Europe fetches higher prices.
Last month, China increased its rebate on value-added tax (VAT) for exports of semi-fabricated aluminium or semiconductors to 16, reported Financial Post.
The proliferation of shipments of Chinese aluminium, lead and zinc to Europe, Turkey and even the United States, suggests a new dynamic may be evolving.
Under this new dynamic China is turning from the world's largest metals buyer to the largest supplier. This development is not liked by the West.
China's journey from the world's largest metals buyer to the largest supplier has alarmed the global community which has been keeping a close watch on Beijing's future moves.
According to the latest data from China's National Bureau of Statistics, aluminium production recorded high growth in April alone after curbs on power production eased and smelters were allowed to expand operations.
According to ING Think (a combination of over 40 economists around the world), Chinese supply growth has begun to exceed demand which has been soft due to Covid lockdowns in China.
However, the Dutch multinational firm's financial and economic analysis wing said aluminium production had recovered faster than expected. It also pointed out the data showing Chinese exports of primary aluminium and aluminium products at 5.97 lakh tonnes, outstripping 1.97 lakh tonnes of imports, as per the media outlet.
A close look at developments in recent months explains the trade pattern in China'saluminium export story.
In the first quarter of 2022, China turned into a net exporter in both February and March as imports collapsed and metal started leaving for Europe. Therefore, Russia's invasion of Ukraine helped China export more Aluminium and make money.
( With inputs from ANI )
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