NEWSBREAK: China to cancel more steel export rebates from Aug 1

China will cancel more rebates of value-added tax for some steel exports from August 1, its Ministry of Finance said on Thursday July 29.

Among them are rebates for flat steel products classified under Harmonized System codes 7209, 7210, 7225, 7226, 7302 and 7304, including cold-rolled coil and hot-dipped galvanized coil.

The removal of the rebates is meant to “promote the transformation, upgrading and high-quality development of the steel industry,” the ministry said.

Uncertainties over tax changes had caused export trading activity for flat steel to thin in the past couple of months, with both steelmakers and traders hesitating to enter into trading positions or sales contracts in the event of changes.

Fears of a removal of the tax rebates for exports of Chinese CRC and HDG have kept the market muted in recent weeks, with overseas buyers deciding to wait things out.

Most trading companies stopped issuing offers in mid-July because their profit margins were not enough to offset the potential loss from a removal of the rebate for the 13% VAT, sources said.

Some trading houses and mills even rushed to move their cargoes to bonded zones to avoid these possible losses.

“It’s very difficult to conclude any transactions for flat steel because of the uncertainty over the tax changes, because buyers are very unwilling to enter into negotiations,” a trader in eastern China had told Fastmarkets last week.

Since mid-May, Fastmarkets’ weekly price assessment for steel CRC, export, fob China main port has largely stayed within $870-950 per tonne.

Similarly, Fastmarkets’ weekly price assessment for steel galvanized coil, 1mm, export, fob China has stayed around $900-1,000 per tonne since then.

China last made changes to its tax rebates for steel exports on May 1, when it removed them for products such as hot-rolled coil and plate.

In addition to the removal of the VAT rebate for steel exports such as CRC and HRC on Thursday July 29, China’s finance ministry also announced an increase in export tariffs for pig iron and ferro-chrome.

What to read next
Chinese buyers are showing strong demand for barley and corn, with significant purchases from France, Australia, and Ukraine
This consultation, which is open until March 8, 2024, seeks to ensure that our methodologies continue to reflect the physical market under indexation, in compliance with the International Organization of Securities Commissions (IOSCO) principles for Price Reporting Agencies (PRAs). This includes all elements of our pricing process, our price specifications and publication frequency. Fastmarkets FOEX […]
China has released the first round of rare earth mining and smelting and separation quotas for 2024 in a joint announcement by the country's Ministry of Industry and Information Technology and the Ministry of Natural Resources on Tuesday February 6
After a consultation period which ended on Tuesday January 30, Fastmarkets has amended the chemical specifications and names of its MB-MNO-0001 manganese ore 44% Mn, cif Tianjin and MB-MNO-0005 manganese ore 44% Mn, fot Tianjin indices.
China Northern Rare Earth Group High Tech Co expects its net profit for 2023 to have decreased by 53.97-61%, the company announced on Monday January 29
The Chinese pulp sector faces supply disruptions and market uncertainty as Canadian mills consider closures amid falling prices