China's Ministry of Commerce has re-issued ferroalloy export licences to 51 enterprises for the first time after the introduction of the licence system. However, this is only an adjustment of export qualification. Lower export duties on ferroalloy products are still expected in the unforeseeable future.
MoC said in a circular on June 17th that the qualified 51 enterprises could apply to provincial-level departments for an export licence. The 51 enterprises include 44 enterprises for general trade, 2 for border trade, 3 in earthquake-hit regions, 1 recommended by western regions and 1 foreign-funded enterprise.
MoC introduced an export licence system last August in an attempt to strengthen ferroalloy export management. Enterprises much be qualified for industry admittance, exported more than 3,000 tonnes of FeMn, FeSi and SiMn in 2007, with products reaching domestic standard and winning ISO9000 certificate. The number of qualified enterprises in each province is also very limited.
Officials from the China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters told Shihua Financial Information that the 51 enterprises have been checked according to MoC regulations and declined to elaborate or make comment on whether ferroalloy export duty should be adjusted.
MoC has entrusted CCCMC and China Ferroalloys Industry Association with the initial examination of relevant enterprises and asked them for advices.
Mr Zhang Zengchan, assistant to the chairman of CFIA, revealed that China's ferroalloy exports collapsed between January and April as demand shrinks dramatically in the international market. He admitted CFIA has called for an adjustment in ferroalloy export policies several times since last December but in vain.
Besides the export licences, Chinese customers have hammered out floor prices for ferroalloy products. This would be equal to an export duty hike when market prices fall below the floor prices.
On the other hand, ferroalloy imports are increasing and that trend still continues. Analysis reports point out that imported resources now dominate domestic market. In May domestic Cr-series alloys markets remained firm but large amounts of imported FeCr flooded in, pressing domestic FeCr producers to suspend production and curbing domestic price rise.
Mr Zhang is not optimistic for the ferroalloy market in 2009. Given dull international demand, the impact brought by imports, an export duty adjustment and weak risk-resistance in China's fragmented ferroalloy sector, the ferroalloy market can hardly walk out of sluggish performance with modest fluctuations in this year.
Source: Steel Guru
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