The Chinese government will impose an export tax on steel products of between 5-10 percent, as well increase the export tax on billets, ferroalloy products, unwrought zinc and nickel ores to between 10 and 15 percent on June 1 this year, according to a Ministry of Finance announcement.
The policy is aimed at further reducing exports of high energy-consuming and highly polluting products, while encouraging the import of raw energy materials and low-level resource products in an attempt to address China's trade imbalance, according to the document released by the MOF.
A total of 83 types of steel products including wire, hot-rolled plate and steel section will be levied between 5 percent and 10 percent. This move follows the cancellation of export tax rebates for those 83 types of steel products on April 15 this year.
The export tax on billets, steel ingots and pig iron will be increased from a current 10 percent to 15 percent on June 1.
The export tax on the ores of nickel, chromium, tungsten, manganese, molybdenum and rare earth will also be increased from a current 10 percent to 15 percent.
Coal tar, various ferroalloy products, unwrought zinc and calcium fluoride export taxes will also be increased from a current level of between 5 percent and 10 percent to between 10 percent and 15 percent.
Furthermore, the export of rare earth metals, refined lead, terbium oxide, dysprosium oxide as well as nonferrous scrap metal will be levied at 10 percent from June 1.
Ammonium parastungstate, molybdenum oxide, ammonium molybdate, sodium molybdate, magnesite and burned magnesium export taxes will range from 5 percent to 15 percent as of June 1, according to Interfax.
In commenting on the tariffs, the article went on to note that the latest round of policy measures aimed at curtailing exports in likely to be broadened over the coming months particularly in the event of increased trading partner pressure.
Regardless of trade imbalances, controlling exports of zinc and nickel is imperative given domestic demand, even though this demand for nickel may diminish as the steel industry overcapacity moves closer to glut. China would do well to fully leverage its position as the global supplier of rare earths as global demand increases.
Obviously domestic demand has also increased, yet supply/reserves are plentiful. Nevertheless, adopting principles seen in the iron ore producing countries will prove highly profitable. Interfax-China