The reduction or cancellation of tax rebate to the export of rolled steel will produce a certain blow to the domestic rolled steel price in a short run, but it is hard to change the upward trend of the rolled steel export in a long run, experts said.
In a bid to check the overgrowth of the export, sterner measures are likely to be taken in the next step, experts predicted.
The Ministry of Finance and the State Administration of Taxation announced on April 10 that as of April 15, the export tax rebate rate of high-end rolled steel products under 76 tariff numbers, including part of special rolled steel, stainless steel plate and cold-rolled steel, will be lowered to 5 percent, and that of 83 tariff numbers including ordinary carbon steel, hot-rolled steel and shaped steel, will be cancelled.
If the government only lowers the export tax rebate, not to take any other measures, this year's rolled steel export is unlikely to have a big drop, but even likely to exceed that of last year, said Jia Liangqun, vice general manager of MYSTEEL.
Several export tax rebate cuts in the past 17 months only caused a temporary decline in export, but failed to check the growth trend of the export, Jia said.
Qi Xiangdong, vice secretary general of China Iron and Steel Association (CISA) stated that the adjustment has been brewed for months, and if it doesn't work, the government is likely to issue sterner control measures.
At present, China's iron and steel have attracted eyes of the global purchasers, and China-made rolled steel products are irreplaceable on the international market.
The effect of the policy adjustment will soon be produced, and China is likely to issue the export license and quota system next, Jia predicted.
Both traders and CISA experts agreed that it is necessary to control the sharp increase of the export, but they also stressed the rationality of the export growth, noting that the surplus of iron and steel trade is not great scourge.
China had been a net importer of iron and steel before 2005, and it just reported a huge trade surplus last year.
According to forecast of the international iron and steel association, the world's rolled steel consumption will reach 1.179 billion tons this year, rising 5.2 percent. All rolled steel consumers from developed countries to developing countries are thirsty for China's rolled steel.
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