Two ministries and commissions plan to increase tax rebate policy to promote steel exports

    Although "Made in China" has seen a rebound in exports, China's steel exports are still falling sharply. China Economic Business Daily reporter learned that in order to stimulate steel exports, some export tax rebate policies are in the pipeline.

    "The Ministry of Commerce is also discussing with us that some tax rebate measures will be introduced in the near future. Enterprises that have completed the transformation of steel enterprises with ultra-low emissions can enjoy export tax rebate." Tong Yanchao, director of the Department of Atmospheric Environment of the Ministry of Ecology and Environment, said recently.

    China needs to save the world's steel companies

    The poor situation in steel exports has become an indisputable fact. Until 2019, China was the world's largest exporter of steel.

    The data released by the General Administration of Customs shows that from January to September this year, the country exported 40.39 million tons of steel accumulatively, a year-on-year decline of 19.6%, with the average export price of USD 822.07 / ton, a year-on-year decline of 0.9%.

At the same time, steel imports are surging. This year, China imported 15.07 million tons of steel, up 72.2% year-on-year. The average import price was US $813.24 / ton, down 31.5% year-on-year.

    "From the trend, the export of steel is decreasing month by month, while the import of steel is       increasing. If the increase of the import of billets is taken into account, the net import of crude steel in China will be present from June to September. This is not only affected by the shrinking demand in the international market, but also driven by China's booming demand and relatively stable price." "Said Qu Xiuli, vice President and secretary general of cISA.

    "The price is determined by the relationship between supply and demand, because the steel produced by many foreign steel enterprises is not wanted, so they have to stop production on a large scale. The electric furnace is better to stop production, but the furnace needs a process and a plan to stop production. The steel produced in this process can only be shipped to China." China Iron and Steel Association to the "China business" reporter said.

    Even since June, the price of imported steel has been lower than that of exported steel.

The import volume in April was the same as the previous year, and China's import volume increased significantly from May, among which the import volume of billet was very large.

    When asked why the price of imported steel would fall while imports would rise rapidly, the cSCSA source said: "From January to September alone, imports of billets were close to 14 million tons, an increase of 10 times that of 2019. From the point of view of crude steel has become a pure import. China has provided the stage for the world's steel companies and helped them digest their products."

India's steel exports to China surged 759 times to 1.5 million tons between April and September this year, making it the largest export destination for finished Indian steel, sources said.

    One of the main reasons for the rapid rebound in Chinese steel demand, the CISA person said, was: "The slight increase in Chinese steel production this year is the result of domestic demand, not determined by the steel industry itself. The coVID-19 epidemic was quickly and effectively brought under control in China, and active economic recovery measures were taken, effectively driving the rapid growth of demand for steel products."

   Discuss the plan of tax refund

   At present, China's steel exports are generally medium and high-end products. In the first nine months, exports fell by nearly 20%, which is not a good figure.

   Through the export tax rebate policy to stimulate steel exports are looming.

   "The Ministry of Commerce is also discussing with us that some tax rebate measures will be introduced in the near future. Enterprises that have completed the transformation of steel enterprises with ultra-low emissions can enjoy export tax rebate." Tong Yanchao revealed.

    Earlier, the state has raised the export tax rebate rate for some steel products, the annual cost of steel enterprises to save about 500 million yuan.

    Not long ago, CISA suggested to relevant departments to optimize the implementation rules of The Circular on Issuance of the State Administration of Taxation of the Ministry of Finance (Caishui [2015] No. 78), appropriately increase the proportion of VAT refund and unify the method of income tax verification. At the same time, the standard should be improved and upgraded as a starting point, under the guidance of the standard specification to cultivate a number of high-quality scrap processing industry leading enterprises, standardize the scrap recycling link order, solve the scrap industry "small scattered" situation.

    In fact, in October, the Ministry of Commerce and the China Iron and Steel Association on the import of steel issues. It is understood that the four business leaders of CISA have made special reports entitled "Operation situation and trend of Domestic Steel Market", "Changes and Analysis of China's Steel Import and export situation", "Review and Prospect of International Steel Market" and "China's Overseas Steel Investment and Its Impact" respectively. Senior business leaders and experts from Shougang, Baowu, Anshan and other nine enterprises discussed and put forward Suggestions on steel import and export and related issues. Director Wang Deyang of the Foreign Trade Department of the Ministry of Commerce responded to the concerns of the enterprises.

    Infrastructure will accelerate Chinese steel demand

    At present, the infrastructure sector is still the main area to drive steel consumption. The development of infrastructure can be seen in another set of figures. Data from China Construction Machinery Industry Association shows that in September, the sales volume of excavators in the domestic market reached 22,598 units, up 71.4% year on year, and the cumulative sales volume from January to September was 212,820 units, up 33.2% year on year.


Chat with us