Recently, the state has again adjusted the export tax policy of the iron and steel industry, raised the export tariff of ferrochrome and high-purity pig iron, and cancelled the export tax rebate of 23 iron and steel products. This also means that the 169 tax lines that originally enjoyed export tax rebate in China will be cancelled and reduced to 0, and the export of domestic steel products will no longer enjoy the export tax rebate bonus. According to the analysis of some experts, the purpose of this adjustment is to reduce the export volume of primary products and related steel products and give priority to ensuring the supply in the domestic market. In the long run, the cancellation of export tax rebate bonus by Chinese iron and steel enterprises is more conducive to the development of the industry. The export of iron and steel enterprises will be affected On July 29, the Tariff Commission of the State Council announced that in order to promote the transformation, upgrading and high-quality development of the iron and steel industry, the export tariffs of ferrochromium and high-purity pig iron will be appropriately increased from August 1, 2021, and the export tax rates of 40% and 20% will be implemented respectively after adjustment. On July 29, the Ministry of Finance and the State Administration of Taxation announced that 23 export tax rebates for iron and steel products would be cancelled from August 1, 2021. Tariff adjustment will be first reflected in the export price of iron and steel products. According to the data of Lange Iron and Steel Research Center, taking hot rolled coil as an example, at the end of April, the export price of China's hot rolled coil was 921 US dollars / ton, 29 US dollars / ton lower than that of India and 69 US dollars / ton lower than that of CIS; On August 10, the export quotation of China's hot rolled coil was 929 US dollars / ton, 29 US dollars / ton higher than that of India and 19 US dollars / ton higher than that of CIS; The new export order index of iron and steel enterprises has continued to fall since May, only 30.8% in July.
In an interview with Huaxia times, Wang Guoqing of Lange Iron and Steel Research Center said that for iron and steel export enterprises, the increase of export tariff on primary products and the cancellation of export tax rebate on related products will increase the export cost of relevant enterprises. Enterprises have to increase export quotation to offset the cost increase caused by tax rate adjustment, and the advantage of export price is gradually weakened, In the later stage, the export volume of steel will drop significantly. With the reduction of price advantage, tariff adjustment will undoubtedly have a significant impact on the export business of China's iron and steel enterprises. Cao Jianyong, chief analyst of plate and strip of Shanghai Steel Union steel division, told the Huaxia times that from the perspective of total volume control, the export volume of iron and steel enterprises will decline, which will have a great impact on the short-term interests of enterprises, but this is mainly for enterprises with large export volume of primary products, High end products and deep-processing products are not affected much. No longer enjoy export tax rebate bonus In addition to the impact on the export of iron and steel enterprises, the readjustment of iron and steel export tax policy is also of great significance to the whole industry. The export tax rebate policy adjustment is based on the announcement on canceling the export tax rebate of some iron and steel products (Announcement No. 16 of the Ministry of Finance and the State Administration of Taxation in 2021) published on April 28, 2021, and further cancels the export tax rebate of iron and steel products with 23 tax numbers retained after the previous policy adjustment. In this regard, according to the analysis of Ping An Securities, this also means that since August 1, the export tax rebate of 169 tax numbers of domestic steel products that originally enjoyed export tax rebate will be cancelled and reduced to 0, and the export of domestic steel products will no longer enjoy the export tax rebate bonus. However, after the cancellation of export tax rebates for some steel products in May, due to the fact that the overseas market price is significantly higher than that in China, the export willingness of enterprises is strong, and the steel export quotation also has obvious advantages, the steel export scale is still large. According to the data of the General Administration of customs, China exported 5.271 million tons and 6.458 million tons of steel respectively in May and June this year, with a year-on-year increase of 19.8% and 74.5% respectively, In the same period, steel imports hovered at a low level, showing a large-scale net export as a whole. "This is the second time in the year to adjust the relevant export tax rate and cancel the export tax rebate." According to Wang Guoqing's analysis, the purpose of this adjustment is to reduce the export volume of primary products and related steel products. The first task of the current development of the iron and steel industry is to ensure domestic supply and not leave pollution and carbon emissions at home. Export constraints will correspondingly reduce the demand for iron ore, which is conducive to the guarantee of China's raw material resources and the return of export resources to China, At the same time, it is also conducive to the rational return of iron ore price, ensure the reasonable profit of China's iron and steel industry, ensure the supply of domestic iron and steel market and maintain the stability of domestic market. In the long run, the cancellation of export tax rebate bonus by Chinese iron and steel enterprises is more conducive to the development of the industry. According to Cao Jianyong's analysis, at present, the export business of China's iron and steel industry is relatively extensive. Under the big goal of carbon neutralization and carbon peak, the iron and steel industry should give priority to ensuring the supply of the domestic market, reducing the export of primary products and encouraging import. For the iron and steel industry, it is necessary to reduce unnecessary primary product production, promote the transformation and upgrading of internal consumption, and finally achieve the purpose of optimizing the industry structure. The reduction of exports will bring some losses to enterprises, but in the long run, this is also the trend.
China's iron and steel industry is facing new changes
Under the goal of carbon peak and carbon neutralization, Ductile manhole cover, Cast Iron Manhole Cover, ductile iron manhole cover, Also as Ductile Gratings, cast iron gratings, Ductile iron gratings and steel enterprises have to face new emission reduction tasks in addition to making profits. Iron and steel enterprises need to make self-change. Carbon reduction and capacity reduction have become the main theme of the moment. For the current development situation of iron and steel enterprises, Cao Jianyong said that China's iron and steel industry is experiencing a change of times and a change from quantity to quality. Reducing energy consumption and improving the ecological environment in the iron and steel industry need to be jointly maintained by large carbon emission industries. It is imperative for the iron and steel industry to reduce the production of primary products and adjust the product structure. It is the general direction of the industry to ensure the stability of the domestic market and adjust the regional concentration of iron and steel, so as to achieve orderly development. At present, the export tax rebate of primary products in the iron and steel industry has been basically cancelled. In terms of export tax rebate, there is no content that can be adjusted. Is it possible to further raise tariffs in the future? According to Wang Guoqing's analysis, despite the gradual effect of China's export tax rebate cancellation policy, under the strong overseas demand for steel, the steel export still showed a significant growth year-on-year in July. With the development of domestic crude steel output reduction and the need to maintain supply and price stability, the tariff of previously cancelled export tax rebate products may be increased in the later stage to ensure the stability of domestic supply and market. For the future trend of the iron and steel industry, Lange Iron and Steel Research Center analyzes that the overall overseas steel market has shown signs of inflection point, the expansion of steel demand has slowed down, the gap between supply and demand in the market has narrowed, and the price action force is insufficient. In July, the growth of the North American market was significantly narrower than that in the early stage. The European market ended the rising trend of the past year and began to decline slightly. The Asian market continued to adjust the differentiation trend. With the adjustment of the overseas market and the rebound of the domestic market, the price advantage of China's steel export is gradually lost, and the export orders fall. At the same time, the cancellation scope of export tax rebate is expanded, and the inhibition on steel export will further appear. It is expected that the steel export will gradually fall in the second half of the year, and the export volume will be reduced compared with the first half of the year.
