May 16, 2008

China may further tighten steel exports when rebound occurs

Interfax China reported that China is likely to impose further controls on steel exports if they rebound, which will result in a decline in Chinese steel exports over the whole year.

Mr Luo Bingsheng executive vice chairman of the China Iron and Steel Association at the Sixth International Steel Market and Trade Conference said that "However, demand for Chinese steel from emerging economies will remain high in the foreseeable future as their infrastructure lags behind their domestic demands."

The Chinese government released a new export tax policy on January 1st 2008 increasing its export tax on low value added products in an attempt to curb rapidly increasing exports of highly polluting and high energy consuming products. The export tax on both steel billet and coke was raised from 15% to 25%.

According to China's General Administration of Customs said China's steel product exports slumped 24.88% MoM to 3.11 million tonnes in February. For the first two months of this year, steel product exports fell 17.2% to 7.25 million when compared to the same period last year. Steel billet exports came to 80,000 tonnes for the first two months down by 92.6% on an annual basis, while exports for February alone were zero.