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| China's Partial Revocation Of Steel Export Duties From Dec 1? |
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Speculation is afloat in China that the central government will revoke part of the existing export duties on various steel products from Dec 1, 2008, according to information made available in Tokyo. The revocation is forecast for products such as HR sheets, heavy plates, large-sized H-beams, wire rods, and welded pipes. But the export duties are expected to continue for semifinished products such as slabs and billets as well as stainless steel products. If part of the export duties is revoked, it will become possible for Chinese offers of HR coil exports at around US$525/ton FOB, given the present 5% duty on HR coils. The current price level of Chinese HR coil exports is estimated at US$550/ton FOB including the export duty. In this connection, it remains to be seen what prices will be offered after the export duty revocation in Chinese HR coil exports to Asian destinations such as South Korea and Japan. Export duties From June 1, 2007, the Chinese government imposed an export duty of 10% on shapes, bars and wire rods, and that of 5% on other products such as heavy and medium plates, HR sheets, CR sheets, and galvanized sheets. The imposition followed the revocation of value-added tax rebates in exports of various steel products. At the time, the Chinese government was thought to have opted for the export duties as export restrictions to meet fears of China's trade friction with the world's various nations. Also, the Chinese government raised the export duties from 15% to 25% on semifinished products and pig iron from Jan 1, 2008. Chinese steel exports China's exports of finished steel products totaled 4,620,000 tons in October this year, down 2,050,000 tons from a month ago, when its industrial production growth stood at 8.2%, compared with an 11.4% increase in the month before. As a result, it is understood that domestic steel demand is slackening. China's various steel companies look set to meet slack domestic demand with enlarged steel exports. But they are having a tough time promoting exports of their products amid the world's falling steel demand. As a result, their negotiated exports in October this year fell considerably from a month ago. If export volumes of products diminish further, the Chinese steel companies could end up selling what they produce below cost in domestic transactions. Beijing's policy The Chinese government has promoted a shakeout of aged production facilities and undersized operations until now toward a streamlined domestic steel industry. With enhanced signs of an economic downturn, though, it is likely that the Chinese government will change its policy in favor of easing the export restrictions to help relieve the domestic steel industry from straits. |
| last modified : Wed 19 Nov, 2008 [11:16] |
