KUALA LUMPUR (Nov 18): Shares of Press Metal Aluminium Holdings Bhd (KL:PMETAL) soared in early trade on Monday, as aluminium futures jumped after China ended a tax rebate over its exports of the metal.

Press Metal gained 7.5% to RM4.73 at 11.40am, giving the company a market capitalisation of RM39 billion, representing its highest gain in a single day since April 4, 2024. The counter settled at RM4.69, its highest since September 13. 

LB Aluminium Bhd (KL:LBALUM) climbed more than nearly 10% in early trade to 51 sen, before settling at 49.5 sen. 

Monday’s surge in Press Metal’s stock price follows a 22% decline from its peak in July, following a fire incident at one of its smelting plants. Year-to-date, the stock is down about 1.5%.

“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,” ING said. “End-users might also have to face higher costs for their raw material,” affecting automotive, construction and packaging industries, it said.

The aluminium benchmark futures on the London Metal Exchange have surged more than 5% to US$2,649.50 (RM11,837.59), after China’s Ministry of Finance announced that it was removing a tax rebate that covers over five million tonnes of exports of the metal.

China is also scrapping export tax rebates for copper, and chemically modified animal, plant or microbial oils and fats, as well as reducing that for some refined oil products, photovoltaic products, batteries, and certain non-metallic mineral products.

Signs of tightness are emerging in base-metal markets, and inventories across the supply chain should mitigate the impact, said the Australia and New Zealand Banking Group.

“However, this could change quickly if China’s recent stimulus measures have their desired effect on economic growth, boosting demand for refined metals such as copper, zinc and aluminium,” the bank said.

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Aluminium soars as China cancels tax incentive on exports