Export tax rebate news slightly affects rebar market

SteelOrbis Shanghai Following the continuous massive rise during the previous two weeks, Chinese long products prices saw a slow increase last week, and leading market prices slightly went down. Due to the rapid increase in each market earlier, there are relatively high profit margins for the products currently held in inventory, which makes traders eager to cash in. In addition, influenced by the rain season, the demand decreased in eastern and southern China with flat commercial activities, intensifying traders' desires to sell their products, which has resulted in slight decrease in market prices. However, because of the brisk semis exports boosting the domestic semis prices considerably, the production difficulty of rolling mills and the decrease in the inventories of most markets brought strong support to domestic long products prices. The export tax rebate for finished steel will probably be reduced to 5 percent as of July 1. This policy will have a great impact on Chinese steel market. For long products, the market trend may remain positive at least for the short term because of the large amount of wire rod exports and relatively high domestic prices, while the quantity of rebar exports is relatively smaller, their current prices are quite low and therefore they will only be influenced slightly. Meanwhile, because no export tariff imposition on semi-finished steel is considered, billet price and export quantity may remain strong. Although the market prices may decrease with the impact of the information given here above, the decrease range will not be large, especially for rebar prices.