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Impacts of China Tax Reduction on Copper Industry

Time: 2021-12-20 Hits: 7

As reported in The 13th National People's Congress by premier Li Keqiang on March 5th, China will implement tax reduction policy in this year, cut the Value-Added-Tax (VAT) for manufacturing industries by 3 percent.

Details are:

1. For manufacturing industries: from 16% to 13%, 3% lower.

2. For Transportation industries: from 10% to 9%, 1% lower.

How will it impact copper industry?

The exchange rate structure of copper price in Shanghai Futures Exchange was expanded to CNY 600/MT at 10:11 A.M. today, comparing to the closing price at CNY 70/MT yesterday. It reduces carrying costs, provides potential arbitrage opportunity, and enlarges follow-up structure as well.