SteelOrbis Shanghai
Following the cancellation of tax rebate, China is considering quota system (export license) practice as plan B if exports still continue growing.
In order to curb the continuing and rapid growth in the country's steel exports, the Chinese Government has adjusted the export tax rebate several times. However, due to the brisk international demand, the policy did not achieve the desired effect. The latest export tax rebate policy announced on April 10, which cancelled the refund for most steel products, has also failed to echo significantly in the domestic market, with an overall steady and upward tendency still in evidence. Therefore, it seems likely that the Chinese central government will move to control exports through stricter measures.
Chinese market sources state that the relevant government authorities have held many meetings with the large-scale mills, mainly focusing on the feasibility and specific methods for the implementation of a quota system for steel exports. However, no conclusion has been worked out yet since it is hard for the various parties to reach an agreement regarding the issue. In addition, the relevant authorities also first need to observe the full effect of the export rebate cancellation. The result is that, in the short run at least, there is no possibility of implementing a quota system for steel exports.