China to improve tax rebates for steel exports

The Chinese Ministry of Commerce and the Ministry of Ecology and Environment are studying new export tax rebate policies to promote steel exports, Kallanish notes from a China Business News report.

Tong Yanchao, the director of the Project Division of the Department of Atmospheric Environment at the Ministry of Ecology and Environment, recently revealed China will introduce tax rebate measures in the near future. These will provide export tax rebates to steel companies that have completed ultra-low emissions transformations. 

The new policies are expected to encourage steel companies to accelerate the completion of ultra-low emissions transformations to obtain financial support, while reducing environmental pollution. Details have not been revealed, but analysts say this would imply differential rebates depending on whether or not companies meet emissions standards.

China’s overall exports have grown despite the impact of the Covid-19 pandemic. Chinese steel exports, however, have declined due to a loss of competitiveness. According to data released by the General Administration of Customs, China’s steel exports were 40.39 million tonnes in January-September, a year-on-year decrease of -19.6%. The average export price was $822.07/tonne, down -0.9%.

At the same time, steel imports have grown rapidly. This year, China imported 15.07mt of steel, an increase of 72.2% year-on-year, and the average import price was $813.24/t, down -31.5%.

Due to strong steel demand, Chinese steel consumption has become a pillar supporting the global steel market. More and more foreign steel producers are seeking to export to China to digest their production, and Chinese products are less competitive due to high prices. A Chinese steel market participant says tax rebates for companies that have completed the transformation will also help reduce pressure from their heavy investments.