Industry News

China raises steel export rebates

October 26, 2018

China has announced a round of increases to export tax rebates effective on goods passing through customs from 1 November. The move is not enough to make Chinese exports much more competitive but will help exporters make deals when international prices are more in line with China.

The biggest change in rebates lifts the rebate on exports of goods under HS codes 721030, 721041 and 721049 from 13% to 16%, meaning VAT will in effect be fully refunded. These are all for iron or non-alloy steel flats over 600mm wide and covers, electro galvanized coils and both corrugated and non-corrugated HDG. China exported 8.84 million tonnes of these products in 2017, down -5.53% year-on-year, Chinese customs data show. As one of the more robust products during the downturn in Chinese exports, there is some scope for exports to recover.

China has also increased rebates by 1% on all goods currently receiving rebates of 5%, 9% or 15%. The HS codes for steel products with a rebate of 9% currently are 722530, 722591, 722592, 722599, 722620, 722691, 722692, 722699, 722710, 722720, 722790 and 722860. These cover alloy HRC, cold rolled alloy steel narrow strip, alloy HDG, alloy steel wire rod and bar-in-coil and further-worked straight alloy steel bars.

Of these products, in 2017 China exported 11.92 million tonnes of flat products, down -15.3% y-o-y. China also exported 6.25mt of long products covered by the measure, down -42.2% y-o-y.

The small increase in rebates means they are unlikely to be the main factor in making Chinese steel exports more competitive. The strength of the Chinese domestic steel market currently means that export offers are only intermittently competitive compared to other regions. The large volume of goods shipped under the 9% rebate, or 10% from November, means that there is likely to be an increase in volumes at the margins.

China has also increased rebates on a number of other goods including manufactured metal goods and other commodities.