Import cost = (LME futures price ± spot premium + premium) * exchange rate * 1.02 * 1.17 + other costs
The LME futures price refers to the price of the third Wednesday contract in Hong Kong;
The insurance premium is usually around $50 (06 level);
Tariff 2%, VAT 17%;
Other expenses include bank fees, customs declarations, commodity inspections, short-term calls, etc., about 170-180 yuan (2006 level).
Export cost = [(LME futures price + trade premium) * exchange rate - other expenses] * 1.17
The LME futures price refers to the price of the third Wednesday of the delivery month;
The premium for export trade is usually around $30 (the bonded warehouse delivery) (06 level);
VAT refunded;
Other expenses include customs declaration, short-call, etc., about 150 yuan (2006 level).
China is a country with shortage of copper resources. Before 2000 exports were subject to export tariffs, and VAT refunds were only 13%. Therefore, the above export cost measurement does not apply to the market situation before 2000.