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Chinese Ferroalloy Producers Concerned About Congress Speeches
= Out of concern that the Congress may enact new regulations/taxes for environmental control =
The ferroalloy producers in China are concerned about whether the National People's Congress now in session will enact new regulations and/or taxes for stricter environmental control because such measures will definitely affect the ferroalloy industries.

In the Congress commenced on March 5, Prime Minister On Jia Bao mentioned that China was required to more aggressively protect the environments, expressing the government's strong concern about the issue and implying that the government would take necessary measures without delay. Once such measures are taken, the ferroalloy producers fear the industry will be most adversely affected.

As a matter of fact, the ferroalloy industry is regarded as one of the most environmentally threatening industries, and is run mostly by private owners, unlike the iron & steel industry most of which are governmentally or semi-governmentally owned. Therefore, the government tends to take regulatory action, among others, onto the ferroalloy industry. In the past, in 2010, the industry was regulated to curtail production through power supply restriction in order to control carbon-dioxide emission.

Another concern of the industry is that the government will most likely establish a new tax mainly for environmental protection, which will be inevitably imposed to the ferroalloy industry as it is supposedly causing the contamination.

In addition to the current high export taxes that have been a big burden for ferroalloy exporters, the rumored two restrictive measures for the industry would badly deteriorate its profitability.

Apart from the bad news, one hope for the industry, especially for the ferrosilicon producers is that the Congress expressed that the government would enforce strict regulations over corruption, which will, if properly done, minimize smuggling (i.e. illegal exports to Vietnam for re-export to third countries such as Korea and Japan) and the market's price-setting will be normalized as the cheaper smuggled materials will gradually disappear.
last modified : Wed 13 Mar, 2013 [10:49]
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