China puts more curbs to temper steel exports

The Chinese government has imposed fresh restrictions in a bid to curb the growth of its surging steel output and exports.

According to data gathered from the official Xinhua news agency and analysts at foreign brokerage houses, the Chinese government will impose tariffs on exports of stainless steel ingots and preliminary processed tungsten from January 1, 2007. Chinese exports had surged by approximately 92 per cent to 32.8 million tonne in the first ten months of CY06.

In addition, the Chinese government has tightened the requirements for steelmakers eligible to import iron ore from overseas suppliers. The import restrictions come at a time when global suppliers have imposed a 9.5 per cent price rise for iron deliveries in CY07.

As part of the new measures announced, the Chinese government has doubled the capital requirement of companies to 20 million yuan (from 10 million yuan earlier) to import iron ore from overseas. Also, firms will have to import a minimum of 700, 000 tonne of iron ore as compared with the earlier 300,000 tonne.

These measures have come at a time when Chinese steel production in the first eleven months of CY06 has jumped 18.4 per cent y-o-y to 381.53 million tonne, according to the Brussels-based global industry body, International Iron and Steel Institute. China alone accounts for 34.3 per cent of the total global output.

In early December 2006, the Chinese government had also announced that the outdated steel-smelting ovens of 26 steel firms would be demolished next year. These measures were part of its overall strategy to help cut Chinese steel production by 100 million tonne over the next five years.

TOUGH STANCE

The Chinese government will impose tariffs on exports of stainless steel ingots and preliminary processed tungsten from January 1, 2007

The government has doubled the capital requirement of companies to 20 million yuan to import iron ore from overseas.

Firms will have to import a minimum of 700,000 tonne of iron ore as compared with the earlier 300,000 tonne

Chinese exports had surged by approximately 92 per cent to 32.8 million tonne in the first ten months of CY06