In a recent report, China's Ministry of Industry and Information Technology (MIIT) stated that the China Iron and Steel Association (CISA) and two other industry associations (for the petrochemical and machinery sectors) have suggested raising the export rebate for some products, so as to boost the sluggish export markets of Chinese industries.
According to the associations in question, with improved industrial production as well as increased sales revenues and profits, China's economic stimulus package has gradually had an impact; however, insufficient demand from the international market is still a significant factor restricting the steady recovery of Chinese industry. For this reason, as regards the steel industry, the CISA has suggested hiking the export rebate for high value-added steel products.
From the fourth quarter of 2009, the CISA has several times made such proposals for increased export rebates. For instance, in May the association recommended strong increases to the export rebate for steel products. At that time, China's export rebate for stainless steel and cold rolled steel stood at 13 percent, with no rebate in effect for hot rolled exports. Indeed, a 15 percent tariff on long product exports was effective at the time.
In June, China's Ministry of Finance increased the export rebate rates for rail steel, alloyed bar and wire rod, medium plate, HRC (excepting stainless steel), narrow steel strip and other products by between four and nine percent.
Commenting on the issue of increased export rebates, Qi Xiangdong, vice secretary general of the CISA, said that certain mills have cut their production considering the sharp slump in some steel prices, and that, also taking into account the RMB exchange rate, China's steel exports still face a difficult situation. The CISA official added that it would be beneficial to the development of China's steel industry to raise the export rebate for flats, stainless steel, pipes and other high value-added steel products. However, he did not disclose the detailed proposal which has been made to the government.