In June 2016, China’s fluorite price
continues increasing. For instance, the average quoted price of fluorite (CaF2>97%)
has now gone up to USD227.66/t (RMB1,500/t). This rebound started in April
accordingly.
Source: Bing
CCM predicts that the fluorite market will maintain this upward trend in the
short term. This is mainly because the operating rates of downstream hydrogen
fluoride (HF) and aluminium fluoride (AlF3) industries still stand high, at
about 60-70%, indicating stable demand. In addition, the continuous rainstorms
in southern China have impacted the operation of flotation devices, probably to
draw back the production.
According to CCM’s research, fluorite has been listed in the resource tax
reform. From 1 July this year, the resource tax on fluorite will be levied
based on value, tax rate at 1-6% (former: tax based on quantity, at USD3.04/t
OR RMB20/t). Meanwhile, the basis for taxation will be modified, from “sales
volume of raw ore” to “sales of raw ore and ore concentrate (OR raw ore
processed products)”.
The resource tax reform will be favourable for domestic fluorite enterprises to
ease the pressure, stabilise the prices and gradually get out of the downturn.
Take coal resource tax reform (tax rate: 2-10%, based on value) carried out on
1 Dec., 2014 for example. According to statistics released by the State
Administration of Taxation, in 2015, the taxes on domestic coal enterprises
were down by USD2.75 billion (RMB18.10 billion) - tax on coal resources on
average down by USD0.65/t (RMB4.3/t). The coal enterprises' tax burden rate was
reduced from 8.0% to 5.7%.
Meantime, the reform will help encourage enterprises to exploit fairly low
grade fluorite and to improve the resource utilisation rate.
“In the supply-side reform context, the de-capacity will force the high energy
consumption industries to enter market clearing. The mining industry closely
related to such industries will also stay sluggish, so will the mineral
prices,” commented an expert to CCM, “At this moment, the advancement of the
taxation based on value and the clearing up of varied charging funds, will play
a role in easing the pressure and reducing the production costs. Drawbacks to
the policy implementation are relatively small.”
In addition, the resource tax reform is
aimed at establishing a regulated, fair, rationally controlling and high
efficiency taxation and supervision mechanism, to give full play to the effects
of resource tax, such as economic regulation, intensive utilisation and saving
of resources and protection of ecological environment.
Notably, the Chinese government is to
completely remove the charging funds, and to enhance the administration on
preferential tax policies.
Specifically, the removal of charging funds will:
-
Cut down the mineral compensation expenses
of all resource categories to zero, stop levying the price regulation fund, and
cancel the local charging funds set up illegally and targeted at minerals
-
Call off all local charging funds related
to minerals, however established not in line with government’s regulations or
by overstepping the authority
In regard to enhancing the administration on preferential tax policies, it is
aimed at improving the comprehensive utilisation rate of minerals by:
-
Reducing the resource tax on minerals
exploited through filling-mining method, by 50%, and on minerals exploited from
the failure phase mines, by 30%
-
Decreasing or removing the resource taxes
(decided by provincial governments themselves) on mineral products extracted
from low grade ore, mullock,
tailings and residues that are expected to use
This article comes from China Fluoride Materials Monthly Report 1606, CCM
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Tag: fluorite