China has decided to lift the export tax rebates on 146 kinds of steel products as of May 1, according to an announcement issued on April 28 by the Customs Tariff Commission of China’s State Council.
The 146 products include HRC, HR sheet and plate, stainless steel products, rebar, wire rod, profiles and some kinds of pipes. The first four digits of the HS codes of the affected steel items are 7205, 7209, 7210, 7212, 7214, 7217, 7219, 7220, 7221, 7222, 7223, 7225, 7226, 7227, 7228, 7229, 7301, 7302, 7303, 7304, 7305, 7306 and 7307. Export tax rebates for CR coils and HDG in coils have remained at 13 percent so far and only non-coiled CR and GI products have been included in the list. Some large trading sources said that they still expect the government will make a separate announcement about the reduction of export tax rebates for CRC and HDG from the current 13 percent to 4 percent, SteelOrbis has learned. But for now, CRC and HDG are the major export items which are still enjoying a 13 percent export tax rebate in China.
The execution time shall be defined by the date of export indicated on the customs declaration form of the export goods. Market players think that export offer prices will stay high or edge up further due to the confirmation of the export tax rebate cut.
At the same time, the local quotations may come under pressure. According to SteelOrbis’ data, the average HRC price in China has slipped by RMB 40/mt or $6/mt on April 28 to RMB 5,695/mt ($878/mt) ex-warehouse. The lower export tax rebate may trigger a higher inflow of HRC to the local market, and this has pushed prices down. “China wants to keep all material in the domestic market and hopes to import more,” a market source from Vietnam said.
Rebar futures at Shanghai Futures Exchange have lost RMB 38/mt or 0.7 percent today, coming to RMB 5,358/mt ($826/mt).
$1 = RMB 6.4853