Since August 1, China has canceled some export tax rebates for steel products.

Release time:

2021-08-03

Since August 1, China has canceled some export tax rebates for steel products.

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China's steel imports and exports in the first half of 2021 (Guo Chenkai drawing)

In order to promote the transformation and upgrading and high-quality development of the iron and steel industry, with the approval of the State Council, the Tariff Commission of the State Council issued an announcement that, from August 1, 2021, the export tariffs on ferrochrome and high-purity pig iron will be appropriately increased, and the export tax rates of 40% and 20% will be implemented respectively after adjustment. At the same time, the cancellation of export tax rebates for some steel products.

"The above measures are mainly to reduce exports." My steel network information director Xu Xiangchun said in an interview with the Shanghai Securities News reporter. Prior to this, China canceled some steel export tax rebates, accounting for more than 60% of steel exports. The further cancellation of export tax rebates for cold-rolled, coated plates, electrical steel and petroleum pipes means that the export tax rebates for most steel products have been zero.

In Xu Xiangchun's view, the abolition of steel export tax rebates has increased the cost of steel exports and is conducive to curbing the growth momentum of steel exports. If we want to further restrict steel exports and reduce the number of steel exports, it is also possible to impose export tariffs on steel in the future.

The Office of the Customs Tariff Commission of the State Council issued an announcement at the end of April this year, announcing that starting from May 1, 2021, tariffs on some steel products will be adjusted and export tax rebates for some steel products will be canceled. Among them, the provisional import tax rate of zero is implemented for pig iron, crude steel, recycled steel raw materials, ferrochrome and other products; the export tariff of ferrosilicon, ferrochrome, high-purity pig iron and other products is appropriately increased, and the export tax rate of 25%, 20% and 15% will be implemented respectively after adjustment.

Customs data show that in the first half of 2021, China's cumulative exports of steel 37.382 million tons, an increase of 30.2. During the same period, a total of 7.349 million tons of steel were imported, up 0.1 percent year-on-year, and 5.749 million tons of steel billets were imported, up 3.8 percent year-on-year. Considering billet imports, China's net export of crude steel in the first half of 2021 was 25.5427 million tons, and the net export volume has exceeded 17.03 million tons for the whole of last year.

According to the analysis of the latest monthly report of the China Iron and Steel Association, from the perspective of exports, the market's expectations for further adjustment of export policies have gradually increased since June. The increase in export costs and the slowdown in steel prices in major economies such as Europe and the United States have prompted domestic steel production companies to take export orders. More cautious, orders have shrunk.

In addition, combined with the production cycle of the steel industry, the industry's new export order index reflects the steel export situation 2 months in advance. At present, the new export order index has fallen back to the contraction range for two consecutive months, indicating that there is greater downward pressure on the domestic steel export situation in the later period.

According to the China Steel Association, on the import side, with the steel industry's profits at a relatively high level in recent years, China's steel imports in the first half of 2021 were basically flat compared to the first half of 2020 and fell sharply by 43% compared to the second half of 2020. The surge in China's steel imports in 2020 began in June, June to November single month imports reached 2.23 million tons, high base effect in 2021 China's steel imports year-on-year is difficult to grow significantly.

(Source: Shanghai Securities News)