According to statistics on the export of finished products in January and February, my country’s finished steel exports increased by nearly 30% year-on-year. Due to the increasing demand for finished products at home and abroad, exports are expected to continue to grow in March and April.
In order to curb exports and balance domestic demand, the Chinese government is considering reducing the export tax rebate rate for low-end products such as hot rolled and steel bars from 13% to 9%.
First of all, due to the impact of the epidemic, many overseas steel mills have not yet resumed production. It is expected that many overseas steel mills will not be able to recover from the new crown pneumonia epidemic until May, which will benefit the short-term export of Chinese steel products.
Second, China has issued a tightening policy on real estate, thus cracking down on illegal credit flowing into the real estate market, which has an adverse effect on steel demand.
At the same time, overseas steel demand remains strong. In order to curb exports, China can only consider reducing steel export tax rebates and indirectly reducing steel production.