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[SMM Analysis] Manufacturing Value-added Tax Rate Cut Short - Term And Long-term Impact On Aluminum Industry.

[SMM analysis] manufacturing value-added tax rate cut short - term and long-term impact on aluminum industry.

SMM3 29 news: on March 28, the state council executive meeting to determine the deepening the reform of value-added tax measures, the meeting decided to, from May 1, 2018, the manufacturing industries such as value-added tax rate from 17% to 17%, the transportation, construction, basic telecommunications services industry and agricultural goods such as value-added tax rate from 11% to 11%, is expected to tax year 240 billion yuan. What is the short-term and long-term impact of this on the aluminium industry? In the short term, the smelter and other shippers control the shipment speed and try to delay the shipment until may, with a view to getting preferential tax rates. Due to delay the shipment, the shipper need for aluminum ingots on futures far month value or the original value positions recently moved to distant months, leading to: 1) Shanghai aluminum 1805 agreement with Shanghai 1805 contract price gap narrowed to rapidly from 80 yuan/ton without gap; 2) it is clear that the main contract of the day is 17408, and the Shanghai aluminum index is up 29,788. The effect of the VAT on the futures spread is only a one-off effect, and the long-term impact on the spread structure remains to be seen.