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| HOME >> Topics List >> March, 2009 >> 31 (Tue) |
| Chinese Ferro-Alloy Producers Memorialize Government Countermeasures For Depressed Market |
| = Phenomenon To Reverse Exports To Imports, To Materialize Reduction of Export Duties |
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It was known that China Ferro-Alloys Producers Association has memorialized the Central Government of China with request to establish the countermeasures for a depression of the market. The contents of this memorization are not known yet but, even after Lunar New Year in China was over, the economic circumstances surrounding Chinese producers of ferro-alloys have deteriorated further on the contrary to an expectation. For example, market prices of ferro-alloys have fallen. Being stimulated by the countermeasures to sustain the economy as adopted by Chinese Government in advance of Lunar New Year, the requirements of ferro-alloys in China had once increased but this expansion of purchases had just supplemented its stocks but was unable to connect with the continuous demand for ferro-alloys. In view of the circumstances as mentioned above, the Association has proposed Chinese Government the countermeasures to support the ferro-alloy industry of China. The economic circumstances to ask for the countermeasures for supports of Chinese ferro-alloy producers are as follows ; (1)Revival of export tax rebates = The Central Government of China announced on the 27th of March to resume export tax rebate (13%) on high grade steel products from April of 2009. This resumption of export tax rebate is applied to such high grade steel products as stainless steel products, silicon steel sheets, cold-rolled steel sheets, high speed steel, alloy steels, and so on. In case of ferro-alloys, any concrete movement to resume export tax rebates is so far not seen but, in view of the resumption of export tax rebates on high grade steel products as mentioned above, it is supposed that some countermeasures for ferro-alloys will be possible to expect. For a reference, export tax rebates on ferro-alloys were revoked (nil) from January of 2005. (2)Reduction of export duties = The matter to reduce duties on exports of ferro-alloys from China is being put on a close-up. The Central Government of China has already reduced from January of 2009 the duties on exports of Chinese steel products. On the other hand, the production of ferro-alloys in China has closely related with the problems of environmental pollution. Therefore, since the Central Government of China has been proceeding to reduce quantities of ferro-alloys to be produced for exports, it is marked to see how does the Government cope with this subject and the ferro-alloy industry of China is now moving to reduce the duty (20% at present) on exports of ferro-manganese and ferro-chrome, both of which consume less volumes of electric power for production. China Ferro-Alloy Producers Association said on the beginning of this week that the Central Government of China will announce in due course of time to reduce the duties on exports of Chinese manganese and chrome based ferro-alloys from the second half of 2009. The background of this aspect is due to the fact that the quantities of ferro-alloys imported into China in January - February of 2009 were larger than those exported from China in the same period and a reverse phenomenon has come up in China. The ferro-alloy industry of China was understood as one of representative industries to export commodities from China but Chinese ferro-alloys have now changed to be shaken by imports of ferro-alloys at discounted prices from overseas countries. The duties to impose on exports of ferro-alloys from China have raised from January of 2008 to 20 - 25% and these exports duties have still continued even from January of 2009. On the other hand, the duty to impose on imports of ferro-alloys into China is only 2%. Consequently, Indian high carbon ferro-chrome has taken the offensive for aggressive sales from autumn of 2008 and, from the beginning of 2009, Chinese high carbon ferro-chrome is becoming less competitive with cargoes to be imported into China, because Indian high carbon ferro-chrome has been offered at 58 US-Cents per lb. of Cr CIF China. The cost to produce high carbon ferro-chronme in China is estimated to be higher than 65 US-Cents per lb. of Cr. The same case is applied to Chinese silico-manganese. Chines silico-manganese is now being offered at US$1,300 per metric ton CIF Japan but the price of Indian product offered for Japan is lower than US$1,100 CIF. This price differential of $200 per ton is supposed to be the duties imposed on exports from China. Therefore, in order to cope with imports of ferro-alloys, a voice to impose antidumping duties on imports of ferro-alloys into China has arisen in China. (3)Reduction of electric power fee = The temporarily reduction (by CNY0.08 per 1 KWH) of electric power fee adopted to the major industrial zones to produce ferro-alloys in China for a period of December of 2008 to the 15th March of 2009 had terminated and electric power fee has returned to the normal level. However, since Chinese ferro-alloys are being produced locally in many places and, accordingly, the movements to revive this temporarily application of electric power have been seen in China. Inner Mongolia is supposed to be moving on this line. However, National Development and Reform Commission, having grasped the industrial policies of China, has criticized a lack of the consistency on administration of electric power and the policy between Central Government and Local Government does not match each other. |
| last modified : Fri 03 Apr, 2009 [11:00] |
