China’s VAT cut could widen SHFE copper, aluminum futures contract price spreads: sources

摘要

China’s plan to cut the rate of value-added tax on nonferrous metals is expected to widen the price gap between nearand long-term futures contracts traded on the Shanghai Futures Exchange, Chinese industry sources said this week. They said “long run” futures contract prices — for example, those due to settle in early 2020 — could be lower once the VAT cut is factored into production costs. This would be the case especially for copper, nickel, lead and zinc traded on the SHFE. Near-term contracts are those due in coming months. During the National People’s Congress this week, China announced it would cut the VAT rate for nonferrous metals to 13% from 16% currently.