Some leading Chinese steel companies confirmed that the much-talked policy to cancel the 5 percent tax rebate on steel export from China as from the expected date of September 1 was not implemented on the expected date, Changjiang Times reported.

    The report cited Wuhan Steel and Baosteel sources as saying that they were still waiting (for the policy). Some said implementation of the policy may be postponed by 10 or 15 days, while some others said there is also possibility that the export tax rebate will not be cancelled.

    It is estimated that about 20 million tons of steel exported by China enjoyed export tax rebate every year. Once China stops to implement the tax rebate, there is no doubt that China's steel export will be strongly hit as those export-oriented steel products have to turn back to the domestic market, which will further aggravate home steel price fall.

    Actually, steel price in China has kept on falling sharply since July. If the export rebate is cancelled, many steel enterprises, which also suffered from sharp rises of iron ore price this year, may step into deficit, experts say.

    Analysts also note that if China reduces steel export, international steel price will definitely go strong, which may inturn further fan international iron ore price. Considering the sesensitive factors, it is advisable for China to temporarily keep tax rebate on steel export, they argue.

    However, China has determined to limit high energy-consuming industries' development, for which it is only a matter of time for China to cancel tax rebate on steel export.