According to official announcement made today in China, the tax rebate regulation for steel exports has been revised. As per the released list exports of cold rolled coils, cold rolled sheets, coated steel products including but not limited to galvanized, tinplate, aluzinc, etc as well as certain stainless steels and alloyed steels will be subject to 13% tax rebate.
Market players have remarked that China has not changed the rebate rates on certain non-alloy materials due to concerns over possible antidumping cases.
Click here to see the preliminary list of the adjusted export rebate rates as per tariff numbers of the products.
Significantly, hot rolled coil is not covered by the new policy - a source of disappointment for many in the industry. A zero rebate rate remains in effect for hot rolled coils.
With regard to the products covered by the current export rebate adjustment, apart from cold rolled coils and galvanized products, the export volumes of the other products concerned are actually quite small. As for GO and special steel China's import volume exceeds its export volume, and so the rebate rate change will have little impact on exports of these products.
Taking into consideration that market prices in the Chinese domestic market are currently higher than in the foreign markets, the policy will not have a significant effect in the short term.
Of course, with foreign mills implementing sharp production cutbacks, the markets are expected to seen greater fluctuations. Small alterations in demand will lead to considerable changes in market prices, which could in turn create greater opportunities for China to export its steel products.