December 02, 2008

Rumor of further steel export taxes raise market concerns in China

According to Shanghai Securities News the market talk has that China's top planning body National Development & Reform Commission intends to further raise up the export duty on steel products, which has been opposed by China Iron&Steel Association and the leading steel mills.

The newspaper cited that Mr Luo Bingsheng vice director of China Iron&Steel Association has also warned that Beijing is likely to unveil stricter curbing policies once the steel export rebounds in the fourth quarter at a recent raw materials conference.

China's steel product and semis export in the first eight months amounts to 45.08 million tonnes and 5.61 million tonnes respectively. There is no doubt that the steel export would break over 50 million tonnes in 2007 and some industrial analysts even predict 68 million tonnes. Such massive steel export has posed great threat to the country's energy conservation, environmental protection and international trade relations.

As a result, the rumor is circulating that the authority is considering removing the entire tax rebate for steel exports and again raise up the export duty for either long products or flat products to 15% and 25% for semis.

Mr Hu Chunli head of Industry Development Research Dept of NDRC, reiterates that curtailing steel export expansion is the main theme of China's steel industry policy. He added that Beijing is mulling over further restrictive measures like introducing a qualification license system for steel exporters and putting a cap on steel processing trade etc. However, both steelmakers and senior officials of CISA reveal that too frequent policy changes are not good for the steel market.

(Sourced from MySteel.net)