August 22, 2008

China unlikely to increase steel export taxes further this year

A senior China Iron and Steel Association official told Interfax at the 2007 China Steel Export Summit held in Beijing on September 20th 2007 that the Chinese government is unlikely to impose any further restrictive polices on steel product exports in the remaining months of this year, due to the success of the current policy in curbing steel product export growth.

Mr Chen Ling deputy director general of the CISA's Metallurgical Industry Economic Research and Development Center said that "The central government does not intend to release any further restrictive policies on steel product exports this year, as current export tax policies are recognized as effectively controlling steel product exports. China's steel product and slab net exports will be in excess of 50 million tonnes this year.”

Mr Chen added that “Although steel product exports were still at high levels in August, we've seen a noticeable fall in growth rates, and this is mainly a result of increased export taxes. Steel product exports are still increasing, and this is mainly due to global demand. However, we have to admit that China's steel production growth is currently outpacing growth in domestic demand, and moderate growth in exports will help solve the domestic oversupply problem and ensure the healthy development of the international market."

However, Mr Chen Kexin senior economist from the Ministry of Commerce's Distribution Productivity Promotion Center said that "China is still excessively exporting steel products and the National Bureau of Statistics has found that export growth is outstripping production growth. However, the Chinese government will continue to pay close attention to steel product exports for the remaining three months of the year and will release further restrictive policies if the current ones are deemed insufficient." Mr Chen also suggested that China should invigorate the current underdeveloped domestic demand for steel products and use part of current exports to supply the domestic market.

According to statistics released by the General Administration of Customs that China exported 5.38 million tonnes of steel products in August, down 9.4% from July 2007 and exported a total of 45.08 million tonnes of steel products in January to August 2007, surging 83.8% from January to August 2006.