BEIJING (Reuters) - China will cut export taxes on some steel products and fertilisers and ditch those for sales abroad of steel wire, rod and bars from Jan. 1, the Ministry of Finance said on Friday, in a series of measures that could boost shipments.
The move is likely to stir concerns among foreign competitors in the United States and Europe that China, the world's top steel producer, may be looking to sell its excess product abroad.
"Many countries see China as possibly selling exports at below cost which has put a lot of pressure on global steel prices," said Chris Jackson, an analyst at UK steel consultancy MEPS, adding Chinese suppliers will seek ways to be profitable on a sustainable footing.
Stainless steel plate export tariffs will fall to 5 percent from 10 percent, while billet tariffs will be 10 percent, down from 15 percent currently.
The country exported 64.5 million tonnes of steel products in the first 10 months of the year, down 30 percent from a year earlier. That included 1.74 million tonnes of steel wire, down 9.5 percent from a year before.
Also Read
"In light of the reduced volumes, we note that Chinese export offers have increased again quite significantly," Jackson said.
However, the impact of tariff cuts on steel products may be offset by increasing demand at home, prompted by steady economic growth.
The China Metallurgical Industry Planning and Research Institute (MPI) expects steel demand to rise in all downstream sectors and reach 726 million tonnes in 2018.
"If you look at the current situation of the steel market in China, it will remain really tight at least in the first half of next year because of the impact of the winter curtailment," said Daniel Meng, analyst at Hong Kong-based brokerage CLSA.
China has ordered cities across northern part of the country to cut production by up to 50 percent at industrial plants, including steel mills, as part of its efforts to combat air pollution during the winter.
Export taxes on three fertiliser compounds - nitrogen, phosphorous and potash - will be lowered to 100 yuan ($15.14) per tonne, compared with the current rate of 20 percent of the total shipment value, it said.
Coal tar tariffs will also be cut and import duties on steel slag are to be ditched, it said.
China will further cut tariffs on IT products from July 1, the ministry said without disclosing details.
($1 = 6.6072 Chinese yuan/renminbi)
(Reporting by Muyu Xu, Josephine Mason and Meng Meng; Editing by Manolo Serapio Jr., Dale Hudson and David Evans)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
