The Hindu Business Line : China hikes steel export tax by 5-15%

Mumbai, Jan. 2 China’s new trade policy, effective from January 1, hiking export taxes between five and 15 per cent, including steel, is likely to push prices up in developed countries.

The policy guidelines have also banned 589 tolling business (importing raw materials and exporting finished products duty-free) in commodities.

Mr Vishal Chandak, senior analyst, Emkay Share and Stock Brokers Ltd, said it would make Chinese products less competitive in the global market and increase steel prices in the developed economies.

The increase in the export tax is likely to benefit domestic players as pricing for steel and other raw materials is done on the landed import price parity basis, he said, adding that in case the exports did not decline, China was likely to increase the tariffs further.

China has taken many measures to reduce export of steel and other products to manage its burgeoning trade surplus with the US. It started with a 10 per cent export tax on semi- finished steel products such as billets and slabs in November 2006.

With exports showing no signs of slowing down, China reduced export duty rebate on various products, increasing export taxes and non-monetary measures such as licensing of steel exports between April 2007 and June 2007. This saw an immediate rise in exports to beat the deadline for implementing the measures. However, with the measures coming into effect the exports started declining.

The new tariff of export taxes, include an increase of five per cent on large steel sections from 10 per cent to 15 per cent as also on bar, rebar and wire rod from 10 per cent to 15 per cent.

The tax on medium heavy wide steel band and HR thin band is up to 10 per cent from five.

The tax on HR narrow band, narrow CR band plated sheet/band, colour coated sheet/strip and welded pipe and common cold-bent sections have been hiked to 15 per cent from five per cent. The levy on ingot and other alloy steel billet/slab has been raised to 25 per cent from 15 per cent.

More Stories on : Steel | Policy | Exports & Imports | Taxation

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