SteelOrbis Shanghai
In order to curb the exports of commodities of high energy
consumption and high pollution,
China's State Council has just approved the adjustment of interim tariffs on some imported and exported commodities. This tariff rate adjustment will be effective as of November 1, 2006.
As regards exports, an interim tariff rate will be imposed on 110 items. The interim tariff rates of 44 varieties of mineral products are at 10 percent, the rates of four other kinds of energy products are at five percent, while those of ferroalloy,
pig iron, and semi finished steel and some other steel products (total 30 kinds) are at 10 percent.
The tariffs imposed on billets may lead to an increase for
billet export prices. Therefore,
billet prices may decrease sharply in the domestic markets. However, slabs are not expected to be influenced as much as billets.
China is competing with
Turkey and the
CIS countries in the international
billet market. Therefore, the price differences are relatively little and so the tariff will influence
China's
billet exports significantly. However, in the
slab market, the most important rival of
China is
Brazil, and there is a wide difference between the
slab prices of the two countries. In addition,
China does not export much
slab. Therefore, Chinese
slab exports are not expected to be influenced much.
The
billet prices in the international markets may also increase due to the higher Chinese prices. Also, the tax on billets means higher
production costs for the rolling mills in
Southeast Asia, which import billets from
China. Therefore,
China's
rebar export quantity and prices may also increase.
Meanwhile, according to the new policy, a relatively low tariff rate will be effective on 58 varieties of imported commodities. Of these, the tariff rates on coal and 25 other kinds of natural resource products will be reduced from 3-6 percent to 0-3 percent.
SteelOrbis will provide the detailed tariff list on Monday.