Rumors have continued to prevail in the market that China is about to remove its export tax rebate for boron-added steel products. Insiders have said that the official report on the removal of the export tax rebate in question was drafted some time ago, and that it has been taken into consideration again in recent days.
Market participants have told SteelOrbis that relevant government departments have also been researching the partial cancellation of finished steel export tariffs, while it is not sure whether the cancellation of export tariffs and removal of tax rebates would be implemented at the same time or separately, with one implemented first, and the other later.
Currently, in China, common long steel products are subject to export tariffs, while boron-added finished steel enjoys a tax rebate. According to China's customs authorities, finished steel with over 0.0008 percent boron can be declared at customs as alloy steel and thus avail of a tax rebate rate of five percent to 13 percent.
The latest data issued by China's customs authorities shows that in the January-November period this year China exported 83.61 million mt of finished steel, up 46.79 percent year on year. It is estimated that around 40 percent of this finished steel consisted of boron-added steel, with over 33 million mt of boron-added finished steel exported in January-November this year. Meanwhile, several major export destinations have complained about China's tax rebate policy on boron-added steel.
However, players in the Chinese market think that, even if the tax rebate is removed, the rising trend of China's finished steel exports will not change as China's domestic consumption growth has slowed down, forcing China to look to increase its exports to the global market.
Normally, China's Ministry of Finance (MOF) makes its the official announcements on export taxes for the coming year in late December, and so all changes in tax policies are expected to be clarified by then.