China steel export structure will be more optimized

Recently, the Ministry of finance, the State Administration of Taxation issued the “Circular” on the adjustment of export tax rebate rate of some products, requirements since January 1, 2015 to cancel the boron steel export tax rebate. It is understood that in 2014 1 to October boron steel accumulative total exports amounted to 32590000 tons, which accounted for 44% of the total exports of steel, so the cancellation of boron steel export tax rebates will export benefit impact on steel prices is not small, but also let the fiery momentum of exports decrease temperature.

National Bureau of statistics data show that in 2014 China’s steel export volume reached a record high of 1 to November total exports reached 83612300 tons, grow 46.78% compared to the same period, no accident annual steel exports will total more than 90000000 tons. The rapid growth of exports on the one hand, the source has a certain competitiveness in the international market in our country is of great relevance to steel, on the other hand also with the export tax rebate policy preferences.

“Due to customs regulations of boron containing volume reached 0.0008% and steel products above can be declared according to the alloy steel, enjoy the export tax rebate policy, thus adding boron to ordinary steel to achieve tax rebate standards, almost became common practice in steel exports.” COFCO Futures Research Institute of iron and steel analyst Liu Jie told the “Economic Daily” reporters, ordinary steel added boron element has the advantages of simple process, low cost, can enjoy the 200 yuan per ton to refund 300 yuan, so the enthusiasm of enterprises export steel containing boron is very high, but in fact, the addition of boron element does not really make the ordinary steel into alloy steel, this part of boron addition is difficult to improve the quality of performance in essence, so the main power source current production of steel containing boron on export tax rebate benefit drive.

And boron steel can enjoy the export tax rebate, the logic behind it is the State encourages the high-end steel exports, but now the boron steel is just to ordinary steel changed names, did not change the low added value of nature, thus boron steel export tax rebate and does not truly encouraging high-end steel export intention, but became enterprises in exchange for tax rebate means, so the cancellation of boron steel export tax rebate has its inevitability, and even in many steel enterprises expected.

The short term, the tariff adjustment will inhibit the first quarter of 2015 and even annual steel exports, that has been in the steel enterprises in low profit era is faced with more severe survival pressure. But based on the healthy development of the industry in the long run, the abolition of the tax rebate will make the steel export structure optimization, forced the elimination of backward production capacity, reduce the international trade friction, in general the advantages outweigh the disadvantages.

“From the business point of view, using boron containing steel for export tax refund no ground for blame, but from the industry interests, boron steel as low grade steel exports not conducive to improve export quality, optimize the export structure.” Chinese international engineering consulting company Metallurgical Building Material Development Department deputy director Chen Ziqi said, in the current iron ore resources in China under the condition of insufficient, a large number of export products with low added value is equal to a disguised form of export of resources and energy, while increasing the energy consumption and environmental pollution at home, not worth the candle. Therefore, the cancellation of the low-end products of export tax rebate, there will be conducive to the structure optimization of export products, enhance the quality of steel exports, change make China’s steel in the international market competitive advantage from low to high quality.

In addition, the abolition of the tax rebate of another layer of meaning is aiming to avoid a more international trade friction.

According to incomplete statistics, in 2014 the foreign anti-dumping cases on file for investigation or more than one hundred Chinese steel, which relates to a boron containing steel anti-dumping accounted for three into. And the reason that has a surge in exports, trade friction intensified, the root is the domestic steel oversupply contradictions, demand remains weak, need to rely on exports to defuse the pressure on production capacity, so the steel enterprises adopt “to change the price of” strategy to seize the export market. Although this is the transfer of excess capacity contradictions, realizing industry profits provide support in the short term, but also from the other hand reflects China’s steel backward production capacity out of the effect is not obvious. The total amount of the export growth spurt will undoubtedly cause vicious export competition, and lead to more trade friction.

“The annual export volume of China’s steel is generally maintained at about 10% of the total production, while export volume in 2014 seemed too large. So the state canceled boron steel export tax rebate on exports, but also the overheating adjustment, also Daobi steel enterprises more strict implementation of industrial policy, and actively eliminate backward production capacity, to prevent vicious competition of cheap exports.” Chen Ziqi believes that further consensus should be the iron and steel industry in the future, to the high added value product export. But only to maintain a reasonable trend of exports and reduce trade friction, optimize the export structure and quality, to ensure the healthy and sustainable development of iron and steel industry in the long run.