From August 1st, the export tax rebate of some steel products will be cancelled
The Ministry of Finance and the State Administration of Taxation issued a notice on the cancellation of export tax rebates for some steel products, said that from August 1, 2021, the cancellation of export tax rebates of some steel products, and issued a list of steel products to cancel the tax rebates.In addition, the Tariff Commission of The State Council decided to adjust tariffs on some steel products starting from May 1, 2021.According to the adjustment list, zero import tariff rate will be imposed on pig iron, crude steel, recycled steel raw materials, ferrochrome and other products.Export tariffs on ferric silicon, ferric chromium, high purity pig iron and other products shall be appropriately raised, and export tariff rates of 25%, 20% and 15% shall be implemented respectively after adjustment.
Previous export tax rebate situation: According to the Ministry of Finance and the State Administration of Taxation in March 2020 issued "Notice on Raising the Export Tax Rebate Rate of Some Products", the tax rebate rate of steel products enjoying export tax rebate was 13%.In terms of export volume, China exported 53.677 million tons of steel in 2020. Most of the steel exports enjoy export tax rebates, and about 5%-6% do not enjoy export tax rebates.
The impact on low value-added varieties is relatively greater: from the list, high value-added varieties such as galvanized, cold coil and silicon steel still maintain the 13% rebate rate, and the canceled varieties are mainly products with lower value-added, including hot rolled coils, medium plates, pipes, rods and wires, and non-alloy color coating, etc.We estimate that the amount involved in the cancellation of export tax rebates is about 37 million tons, accounting for about 70% of exports in 2020.
Actual impact estimation: in fact, the cancellation of the tax rebate will not lead to the export of related products directly reduced to zero. On the one hand, the market has long expected the policy adjustment, export prices have been raised in advance, and the products have been exported with higher prices to hedge the impact of the cancellation of the tax rebate;On the other hand, the overseas economy is still on the way to recovery, steel demand is strong, the acceptability of the price is relatively high.The policy is expected to lead to a decline in exports of about 20 million tons a year, or about 2% of 2020 production.But if overseas economies cool later and price acceptance declines, the amount affected could increase.
2021 11/01