China will raise export rebates for textiles, steel, petrochemical and electronics starting on April 1st.
According to a report in the Xinhua newspaper, which didn’t provide further details, rebates will also be increased to help exporters of non-ferrous metals, and information-technology products.
The China Iron & Stel Associayion suggested in a report to the relevant govenrment departments that all steel exports should enjoy an export rebate. The export rebate rate for such high value added products as cold rolled coil, galvanized coil, alloyed steel should be raised to 13% from 5%. CISA disclosed that the real rebate rate change may be a little different with those suggested though they have been trying to get more increase. Further, hot rolled steel coil would not enjoy export rebate. The final result will be announced soon by Ministry of Finance of China.
Customs statistics show that steel export tonnage for February was 1.56 million tonne down by 49.8%YoY and 18.3%MoM. The total export volume for January and February is 3.47 million tonnes, a drop 52.1% YoY from the period of last year. There are few new contracts in 2009 since 60% of them were signed in late 2008. Export tonnage is likely to see an 80% slump in 2009.
Market analysts believe that the rebate rate increase may help, but what really accounts for the fall is poor overseas demand. Export prices for Chinese steel products are not as competitive in the world market as those by South Korea, Turkey, South East Asia and CIS countries which are much lower. It is regarded as an effort by Beijing to support the Chinese steel industry in the current world recession. China has also lowered export the rebate rate or levied an export tax to cool exports in the past few years.
Source: Steel Guru
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