So, the CCP was subsidising steel exports, and then they stopped. Wait a minute, isn't that what was supposed to be the problem with some Australian exports to China recently?? So now there is more room for Japanese and Korean exports. Is that a serious problem?

Chinese steel exports cool down after rebate removal

Steel export activity among Chinese mills and traders has cooled recently after Beijing decided
to remove tax rebates on more steel products effective from August 1, mark...

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SteelMint Bureau

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12 Aug 2021, 10:34 IST

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Steel export activity among Chinese mills and traders has cooled recently after Beijing decided
to remove tax rebates on more steel products effective from August 1, market sources indicated.

"After the removal of the rebates, we have not signed a single deal for cold-rolled coil (CRC) and galvanized
steel (GI)," a major steel exporter based in Shanghai declared.

On July 29, China announced it was cancelling the tax rebates on another 23 steel products
including CRC and GI (China's most exported steel products) effective August 1, as Mysteel
Global reported. The rebates on 146 steel products were axed back in May.

"Now we're entering a kind of business chill where overseas buyers need to adapt themselves
to our changed policy and higher prices," an official with a major steelmaker's international
trading subsidiary in North China's Hebei province advised.

As of August 6, the export price of SPCC 1.0mm CRC had edged up another $2/tonne to
$1,005/t FOB from North China's Tianjin port after the prior week's jump of $60/t, according
to Mysteel's assessment.

Similarly, as of August 6 Mysteel had assessed the export price of DX51D+Z 1.0mm hot-dipped
GI lower $2/t to $1,075/t FOB from Tianjin port, following the spike of $90/t over the week prior
to last week.

However, once the "calm-down" period of adjustment is completed, exports of these products
should recover, the international trader suggested. "They (foreign buyers) will still need to buy
from China and by then, the export volumes will gradually stabilize for us," he believed. Other
steel exporting countries may not have the same level of price competitiveness or the capacity
to ship to regions such as South America, he argued.

"Logistics will be the key issue. Unlike wire rod or hot-rolled coil, which is usually sold in large
quantities, exporting something like only 1,000 tonnes of GI will be very hard for many," he
elaborated.

Noting Beijing's intention of keeping more steel inside the country, especially steel products with
low-added value, Chinese steel suppliers are less encouraged to ship products abroad, Mysteel
Global noted.

"We are going to stop providing hot-rolled coil (HRC) offers until September, to focus more
on importing steel semis," a major steel exporter based in East China said.

HRC used to be another popular product for Chinese exporters but currently, China-origin hot
coils have largely lost their price competitiveness since the removal of the taxes from May 1,
market sources indicated. Demand for Chinese hot strip has been further dampened with the
outbreaks of COVID-19 now ravaging many countries in ASEAN, a major destination for
Chinese steel, they said.

As of August 6, the export price of China-origin SS400 4.7mm HRC was $934/t FOB from
Tianjin port, reversing down by $6/t on week. In comparison, the price of HRC of the similar
grade from Russia was recently traded at $910/t CFR Vietnam for November shipment,
according to Mysteel's tracking.

Written by Olivia Zhang, [email protected]
https://www.steelmint.com/insights/chinese-steel-exports-cool-down-after-rebate-removal-238075