Luo BingSheng hints at export rebate policy changes

SteelOrbis Shanghai Gordon Moffat, general director of the European Confederation of Iron and Steel Industries (Eurofer), has declared that, if China does not cut down sharply on its steel exports, then anti-dumping suits against China will be inevitable. In the first 10 months of 2006, hot rolled steel imports from China to the European Union (EU) totaled 1.6 million mt, as against 400,000 mt for the same period of 2005. Also in the Jan-Oct 2006 period, EU imports of medium plate and wire rod from China amounted to 500,000 mt and 700,000 mt respectively; whereas the import figures for both had amounted to only100,000 mt for the same period of 2005. In recent days, China Iron and Steel Association (CISA) executive vice-chairman Luo BingSheng pointed out that, given the frequent trade friction in relation to China's steel exports, if the country's steel exports volume for the first two months of this year remains at the level of Q4 last year, then the relevant authorities will be obliged to further reduce the export rebate rate or even cancel the export rebate policy altogether. However, the issue of the export rebate adjustment is good news for the Chinese market in the short run. Since the international market is dependent on China's steel products to a certain extent, overseas importers are eager to make more purchases before the announcement of the new rebate policy, thus causing a supply shortage in the domestic market and an inevitable increase in prices.