According to the decision of the State Council, starting from December 1, China began to cancel the export tariffs of 67 steel numbers, including hot-rolled coils, hot-rolled plate, large sections, welded pipes, and some steel alloy steels; , continue to retain the original export tariffs for steel products such as thread, wire rods, rods, small and medium profiles, and uncoated steel wire.
Why does the state cancel the export tariff on some steel products? Why at the same time keep some steel export tariffs?
The steel industry is a typical high-consumption, high-pollution and resource-based industry. According to China's industrial development strategy and the requirements of building a resource-saving and environment-friendly society, China should not encourage the export of steel products. It is precisely because of this that China's previous tariff adjustments were aimed at increasing steel tariffs and limiting excessive exports of steel products. For example, last year the country raised export tariffs on steel products three times in order to curb excessive steel exports.
Jia Junming, an analyst at the China Iron and Steel Industry Network, believes that the cancellation of 67 tariff lines on steel tariffs is intended to help iron and steel companies tide over difficulties. Since the beginning of the third quarter, the profitability of China's iron and steel enterprises has dropped drastically, and the loss of enterprises has rapidly expanded. Among the 71 large and medium-sized iron and steel enterprises of the China Iron and Steel Association, 23 large and medium-sized steel enterprises suffered losses in September, and the loss reached 32.4%; January-September loss was 1.154 billion, which was the same period of last year. 18.06 times, and this trend continues to develop after October. The elimination of export tariffs on steel products can reduce the cost of steel products exported by steel enterprises and increase the total amount of steel exports, thus helping steel companies to tide over the difficulties.
Jia Junming believes that the current adjustment of steel export tariffs also embodies the principle of “differential treatment and pressure to saveâ€. On the one hand, the export tax rates for some high value-added plates, large profiles, and some alloy steels are cancelled. At the same time, the 25 tariff lines with relatively low values ​​such as threads, wire rods, rods, small- and medium-sized profiles, and uncoated steel wires continue to impose original export duties. Obviously, the focus of policy adjustment should be to optimize the structure of exported steel products and increase the policy guidance for upgrading steel product structure.
According to Jia Junming, exports of some high value-added steel products are not only conducive to the development of the domestic economy, but also can increase the production capacity of high value-added steel products in China and optimize the steel industry structure. The cancellation of some high value-added steel export tariffs reflects the flexibility of China’s iron and steel industry policy in adhering to the established development strategy and is a concrete embodiment of policy flexibility.
Therefore, the short-term impact of this adjustment on steel export tariffs can ease the downward pressure on domestic steel prices. Since the third quarter of this year, domestic steel prices have plummeted and ordinary steel prices have fallen by nearly half. The reduction of export tariffs on steel products will help increase steel exports and ease downward pressure on domestic steel prices. At the same time, export growth is expected to increase the profits of some steel companies. Those state-owned large and medium-sized iron and steel enterprises with large total steel exports and high value-added products, such as Angang and Baosteel, can significantly reduce export costs after the introduction of new tariff policies, and are the main beneficiaries of policy adjustments.
In the long run, this tariff adjustment can speed up the structural upgrading of the steel industry. At present, the domestic steel industry is in deep trouble, canceling high value-added steel export tariffs, while continuing to retain low export value steel export tariffs, can eliminate wire, thread and other low-end steel excess production capacity, enhance the relatively high value-added steel sheet, large sections and other value-added steel Manufacturers' market competitiveness, optimize the structure of China's steel products, and accelerate the pace of structural upgrading of steel products.
Why does the state cancel the export tariff on some steel products? Why at the same time keep some steel export tariffs?
The steel industry is a typical high-consumption, high-pollution and resource-based industry. According to China's industrial development strategy and the requirements of building a resource-saving and environment-friendly society, China should not encourage the export of steel products. It is precisely because of this that China's previous tariff adjustments were aimed at increasing steel tariffs and limiting excessive exports of steel products. For example, last year the country raised export tariffs on steel products three times in order to curb excessive steel exports.
Jia Junming, an analyst at the China Iron and Steel Industry Network, believes that the cancellation of 67 tariff lines on steel tariffs is intended to help iron and steel companies tide over difficulties. Since the beginning of the third quarter, the profitability of China's iron and steel enterprises has dropped drastically, and the loss of enterprises has rapidly expanded. Among the 71 large and medium-sized iron and steel enterprises of the China Iron and Steel Association, 23 large and medium-sized steel enterprises suffered losses in September, and the loss reached 32.4%; January-September loss was 1.154 billion, which was the same period of last year. 18.06 times, and this trend continues to develop after October. The elimination of export tariffs on steel products can reduce the cost of steel products exported by steel enterprises and increase the total amount of steel exports, thus helping steel companies to tide over the difficulties.
Jia Junming believes that the current adjustment of steel export tariffs also embodies the principle of “differential treatment and pressure to saveâ€. On the one hand, the export tax rates for some high value-added plates, large profiles, and some alloy steels are cancelled. At the same time, the 25 tariff lines with relatively low values ​​such as threads, wire rods, rods, small- and medium-sized profiles, and uncoated steel wires continue to impose original export duties. Obviously, the focus of policy adjustment should be to optimize the structure of exported steel products and increase the policy guidance for upgrading steel product structure.
According to Jia Junming, exports of some high value-added steel products are not only conducive to the development of the domestic economy, but also can increase the production capacity of high value-added steel products in China and optimize the steel industry structure. The cancellation of some high value-added steel export tariffs reflects the flexibility of China’s iron and steel industry policy in adhering to the established development strategy and is a concrete embodiment of policy flexibility.
Therefore, the short-term impact of this adjustment on steel export tariffs can ease the downward pressure on domestic steel prices. Since the third quarter of this year, domestic steel prices have plummeted and ordinary steel prices have fallen by nearly half. The reduction of export tariffs on steel products will help increase steel exports and ease downward pressure on domestic steel prices. At the same time, export growth is expected to increase the profits of some steel companies. Those state-owned large and medium-sized iron and steel enterprises with large total steel exports and high value-added products, such as Angang and Baosteel, can significantly reduce export costs after the introduction of new tariff policies, and are the main beneficiaries of policy adjustments.
In the long run, this tariff adjustment can speed up the structural upgrading of the steel industry. At present, the domestic steel industry is in deep trouble, canceling high value-added steel export tariffs, while continuing to retain low export value steel export tariffs, can eliminate wire, thread and other low-end steel excess production capacity, enhance the relatively high value-added steel sheet, large sections and other value-added steel Manufacturers' market competitiveness, optimize the structure of China's steel products, and accelerate the pace of structural upgrading of steel products.
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