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Steel exports may falter after policy change

By Yu Hongyan (chinadaily.com.cn)
Updated: 2010-06-07 15:45
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Chinese steel exporters may see hurdles later this year, as the country is set to limit exports in high polluting, high energy-consuming, and resource sectors, according to media reports Monday.

China is to lower or scrap export tax rebates on exports in such sectors, and lift export duties of certain products starting from July, the Economic Information Daily reported, citing a senior official from the Ministry of Industry and Information Technology.

The official said that the steel sector will face the most adjustments in this round of export policy changes, especially steel plate products, which may enjoy fewer or no export incentives offered earlier.

China exported 13.02 million tons of steel products in the first four months of this year, up 98.83 percent over the same period last year, according to customs data. Meanwhile, export price averaged $767.69 per ton, a decrease of 32.9 percent year-on-year.

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In April alone, steel exports jumped to 4.31 million tons, an increase of 205.3 percent year-on-year, or 29.4 percent month-on-month.

Analysts say it is the surging export that will lead to the policy change on steel exports, as it is not good news for the steel industry to rush in exports with dropping prices, considering the skyrocketing costs of raw materials in this sector, the China Securities Journal said.

But Qi Xiangdong, deputy secretary general of the China Iron and Steel Association, argued that the surge in April came as a result of a low basis last year.

The country will also tighten control on exports of non-ferrous metal and fertilizer, according to the China Securities Journal.