China's announcement that it will end tax rebates on exports of aluminium semi-manufactured products caused market mayhem on Friday and may have major long-term ramifications for the global aluminium supply chain.

In the near term, the cancellation of rebates will make Chinese aluminium more expensive on the international market and could lead to a reduction in export volumes. Chinese aluminium exports have surged over the past two decades. In the first half of 2024, they rose 13% year-on-year.

Aluminum jumped on Friday after China said it would cancel a tax rebate that’s helped fuel a decades-long boom in exports and shielded an industry prone to overcapacity.

China's finance ministry said on Friday it would reduce or cancel export tax rebates for a wide range of commodities and other products, effective Dec. 1. The country will reduce the export tax rebate rate for some refined oil products,

China is ending its export tax rebate policy for aluminum and copper, while lowering it for some refined oil and battery products as overcapacity concerns have grown among global trading partners.

China's finance ministry said on Friday it would reduce or cancel export tax rebates for a wide range of commodities and other products, effective Dec. 1. The country will reduce the export tax rebate rate for some refined oil products,

Alcoa (NYSE:AA) +7.8% and Century Aluminum (CENX) +4.2% pre-market Friday as prices for aluminum and other industrial metals jumped after China canceled a tax rebate on exports of certain commodities.