Cancellation of some Export Tax Refund and some Import Tax

The long-awaited cancellation of the export tax refund for Chinese steel products was finally announced, although its impact on market was limited. Since the Chinese government’s goal is to reduce national steel production, emissions as well as electricity consumption, import taxes on semi-finished products and raw materials have been reduced accordingly.

In light of the latest announcement by Ministry of Finance, from May 1^st of 2021, China will cancel the export tax refund of most steel products (146 of 166 types). The new rule cover the majority of export steel products including hot rolled coil, hot rolled plate, screw-thread steel, wire rod as well as H-shaped steel. However, it does not apply to cold-rolled coil and zinc-coated steel.

Since January this year, the rumor about this measure has raised, which has attracted expectations. However, after study, it is found having slight effect on hot rolled coil export because the price of this month has shown the cancellation. Comparing with that, the wire rod market has changed significantly as it did not put the cancellation into calculation.

At the same day, Ministry of Finance announce the cancellation of several import tax. There will be no import tax on pig iron, square billet, slab, DRI as well as ferrochrome since May 1st. As the non-ASEAN supplier will share the same condition with Southeastern manufacturers, there will be huge change in square billet as well as slab market. Therefore, the competition in China semi-finished products market will be fierce.

The aim target of China is eliminating the emission, but expect a minimum impact on the consumption. Hence, the semi-finished products and raw material will help China to meet the goal. The cutback on export tax refund will also help the focus leaning to local deals.