China pulls rebate support on some exported steel
For the past year, China has offered export rebates of from 10 to 13 percent on more than 1,000 types of steel and steel products.
Image provided by iStock.

China pulls rebate support on some exported steel

Analysts say move could prompt output cuts in world’s largest steel producing nation.

Subscribe
April 29, 2021

The central government of the People’s Republic of China has indicated it will remove export tax rebates on 146 kinds of steel products starting this weekend, according to MySteel. The Beijing-based information service says the announcement was made April 28 by China’s Ministry of Finance and its State Taxation Administration.

Olivia Zhang of MySteel writes, “After a long wait and market speculation, China's governing bodies have finally announced the list of the steel products that will no longer enjoy any tax rebates when exporting, and the new measure will be applied to any Customs declaration forms that are dated on May 1 and afterwards, the joint statement explained briefly.”

Zhang says among the 146 products covered are carbon, alloy and stainless steel products, including hot-rolled, cold-rolled and galvanized steel. Also listed are some forms of tubes and pipes, bars and wire rods, steel rails and angles.

At a mid-March Argus Media online event, that company’s Tim Hard mentioned the rebates as a factor that would have “an outsize effect on the global and regulatory” landscape in 2021.

Bloomberg, in an April 28 online article, describes the move as an effort by the Chinese government to “ramp up efforts to cut output and clean up one of the biggest carbon emitters” in the nation.

Slightly more than one year ago, in mid-March 2020 as China recovered from its bout with the COVID-19 virus, the government announced it was raising the export rebates on more than 1,000 steel products to from 10 to 13 percent, according to MySteel at that time.

China has been the world’s largest steel producer for many years, and in the last few years has made 1 billion metric tons or more steel. Although China is not a major exporter of steel to the United States, the amount it makes often stirs accusations of overcapacity by steelmaking trade associations in the U.S., Europe and elsewhere.

The official announcement (in Chinese) about the rebate cuts can be found on this web page