Net exports of China's crude steel are expected to drop 60
percent for the second half compared with the first six months,
according to the China Iron and Steel Association (CISA).
Net exports of crude steel stood at 30.6 million tons for the
first six months, and are forecast to fall to 12.24 million tons in
the second half.
From April to June, the government took a series of measures to
curb steel exports, which accounted for the forecast, said CISA
secretary general Luo Bingsheng.
The government lowered export rebate rates of some special steel
products and cold-rolled products to five percent from April 15. It
then removed export rebates on 83 steel products and lifted the
export tax from five to ten percent on them from June 1. Export
taxes on primary steel products were also raised by five percentage
points.
Based on the quantity and value of steel exports in 2006, these
measures would increase the total cost of steel exports by 21.8
billion yuan, forcing steel producers to sell on the domestic
market, said Luo.
If producers failed to reduce production in the second half, the
domestic market would be over-supplied and prices would fall, Luo
said.
Meanwhile, fewer exports from China would push up international
prices and lead to an export rebound.
"This will probably result in drastic domestic market
fluctuation. Steel producers had better set production goals in
accordance with demand and slow their production growth rates to
keep a stable market," he said.
China's crude steel output amounted to 41.5 million tons in the
first half, up 13.3 percent from the same period in 2006.
(Xinhua News Agency July 31 2007)
