Exports up on rebate talk

Market rumors that the government is about to scrap the export tax rebate are behind a recent steel export surge, analysts said yesterday.

The nation posted a record 7.68 million tons of steel exports for August, a sharp rise of 470,000 tons from July, and up 42.78 percent year-on-year, according to Customs figures.

China has exported 41.84 million tons of steel products worth $41.89 billion since January.

Some analysts are linking the export surge to postponed changes to the export tax rebate policy, which was due to start at the end of August. "Speculation the rebate would be scrapped caused a spike in the export volume," Wang Jianhua, research director of Mysteel.com, a steel information provider, said yesterday.

Yang Baofeng, an analyst at Dongfang Securities, said much of the export tax rebate policy has been dropped already, and only a few steel products are still eligible for the refund.

"Apart from a few varieties of high value-added products, such as alloy products, most are already excluded from the export tax rebate," Yang said.

"The latest figure is in accordance with market expectations."

Whether the latest export data will prod the central government to move more quickly on scrapping the export tax rebate is still unclear. Steel bellwether Baoshan Iron & Steel and Shougang Group declined to comment on the figures and possible policy changes.

"I personally welcome the end of all export tax refunds as soon as possible. Once the policy is implemented, export volume might drop at first, but that will drive domestic steel mills to focus more on product quality and restructure their businesses to be more sustainable," Wang said.

Source: China Daily