Commenting on China's removal of the export tax rebate on boron-added steel products effective as of January 1, 2015, EUROFER director general Axel Eggert stated, "The boron-specific VAT removal is a welcome sign of China's awareness of concerns voiced by the global steel industry on China's steel policy and practices. But this measure is lacking commitment because it excludes the basic hot rolled wide strip product, while at the same time creating new incentives for Chinese exporters to continue enjoying the export rebate through the back door. We therefore may see a continuation of the peak exports recorded in 2014 for these alloyed products after the boron-specific rebate elimination is absorbed by the market, potentially causing higher technical steel performance risks."
EUROFER indicated that China practices an industrial policy actively supporting its domestic steel industry. Having introduced VAT export rebates promoting higher value-added products, this measure has triggered unprecedented export surges in a weak domestic steel market. The recent lifting of Chinese VAT export rebates applies to a selection of the steel products concerned and only when boron is added. Reportedly, Chinese operators are looking for ways to circumvent the rebate removal by replacing boron by other alloys such as chrome.
According to EUROFER, European imports of Chinese boron-alloyed steel products surged in the first 10 months of 2014 year on year by 83 percent in plate and by 375 percent in rebar.
"Trade-distorting industrial policies by third countries are detrimental to the recovery of the European steel industry and destroy jobs in Europe. The EU must vigorously act to re-establish fair trade for European steelmakers. We strongly welcome the commission's awareness of the problem," Eggert concluded.