China’s steel exports slow in May on tax policy

Time: 2021-07-01

China's steel exports in May fell from April as export bookings slowed ahead of Beijing cancelling tax rebates to deter exports.


May steel exports declined by 33.9pc over April to 5.27mn t but rose by 19.8pc from a year earlier, according to Chinese customs data. January-May exports increased by 23.7pc to 30.92mn t on the year.

Most steel export shipments in May were spot orders taken in March and early April when Chinese steel prices were on an uptick during the high season for domestic consumption. Chinese mills also started adding the tax costs into export offers in March and April before Beijing zeroed out rebates for the 13pc value-added tax (VAT) from 1 May.

Shanghai ex-warehouse prices for hot-rolled coil (HRC) increased by 19pc or 920 yuan/t ($144/t) to Yn5,760/t from 1 March to 30 April, outpaced by the fob Tianjin HRC index that rose by 33.9pc or $234/t to $925/t fob during the same period. Overseas buyers' appetite has slowed from January and February that had lifted China's exports to a 4½-year high in April, but Chinese steel remains at enough of a discount to EU and US markets to absorb the cancelled rebate costs. Ex-works prices for northwest EU HRC and US Midwest were assessed at equivalents of $1,389/t and $1,813/t on 4 June. This puts Chinese fob Tianjin HRC at $923/t at discounts of $466/t and $890/t, respectively, to ex-works prices of northwest EU and US Midwest.

June steel exports are unlikely to increase much over May, as many mills' June export orders were taken in April before the tax rebate policy was settled. But Chinese steel remains at a deep discount to overseas markets, fuelling worries from mid-May that Beijing may add more taxes to exports as a way for China to keep more steel in domestic markets and limit domestic crude steel output. "If export tax policies remain uncertain before the end of June, China's exports in June and July are likely to fall further," an east China trader said.

China's May steel imports fell by 5.8pc on year to 1.21mn t in May but rose by 2.7pc from April. China imported 6.1mn t of steel in January-April, up by 11.6pc on the year.

Tel: 0086-(0)757-83128353

Room H, 30/F, Foshan Development Building, No.13, East Hua Yuanrd, Foshan, Guangdong, China

Copyright © Smartroof All Rights Reserved.    Sitemap   XML