Beijing announced the cancellation of export tax rebates for some steel products, including cold rolled coils and galvanized steel coil. This is bad news for many importers around the world. However, the impact on Chinese suppliers may be short-lived. So far, the long awaited export tariff has not been announced.
The State Administration of Taxation of the Ministry of Finance announced that the export tax rebates of 23 kinds of steel products will be cancelled from August 1, 2021.
The list includes galvanized color coated steel materials, tinplate, some steel rails, steel pipes used in oil and gas industries, and the most sensitive is the tax refund of cold rolled coil and galvanized steel. After the cancellation of export tax rebates for most other finished steel (including hot-rolled coils) in April, the import of cold-rolled coils and galvanized steel from China is more attractive to many foreign buyers because cold-rolled coils are cheaper than hot-rolled coils.
Officials said the reason for the move was the government's intention to crack down on steel mills' enthusiasm to further expand crude steel production and force them to focus on producing high-quality products. However, a Chinese trader said: "China doesn't seem to like people who do steel business in this country ." Another major trader told on July 29: "the buyer shall bear all the risks of all the cold-rolled coils we recently exported. So we won't lose money now, but it will be a huge problem for our customers and the whole of China.
Most Chinese steel mills and traders have suspended the provision of cold rolled coil and galvanized steel in the international market because they need time to understand the situation. Some suppliers facing the external market increased the quotation of cold rolled coil and galvanized steel by US $50 / ton and US $30 / ton from the level last week to US $980-1000 / ton FOB and US $1010-1030 / ton FOB respectively. However, a representative of a major state-owned trader in China told metal : "it is still about 60 US dollars / ton more expensive than China, and our galvanized steel is 120 US dollars / ton cheaper than India.
" Another trader shared his view: I'm not sure about all foreign markets, but South America will certainly be our big customer. They don't have much choice. "“ The United States and the European Union will cry the most because after China cancels the tax rebate, they will have to accept higher prices from countries and regions such as Taiwan and Vietnam, said the head of the Export Department of China's large iron and steel enterprises.
Post time: Aug-05-2021