Center

Government controls may curb steel exports

(Xinhua)
Updated: 2007-05-23 15:39

Steel industry analysts are predicting China's steel exports will continue to rise this month despite government measures to dampen sales overseas.

The government on Monday imposed export tariffs of five to 10 percent on more than 80 steel products, including steel wire, sheet and plate, and raised export tariffs from 10 to 15 percent on primary commodities such as steel billets, ingots and pig iron from June 1.

However, the rise in the cost of exports combined with the seasonal low demand in the global market in summer would probably lead to falling exports later in the year, said a senior analyst Jia Liangqun.

Yet, Zhou Xizeng and Li Hongliang, of CITIC Securities, agreed the steady increase in exports would continue, and the higher export tariffs would lead to rises in international prices and China's export prices.

Three cuts in China's steel export rebates since 2004 had resulted in increases in both prices.

The increases tariffs were the government's response to the April figures showing a record export of 7.16 million tons, much higher than the forecast maximum of 6.5 million tons.

"The market is about to react this time," said Jia.

Analysts agreed, however, the policies would fail to reduce exports in the short run, and would probably start to take effect from July.

Export figures for May would still be "striking", possibly even higher than April's, said Zhou Xizeng and Li Hongliang, of CITIC Securities, as steel firms aimed to boost exports in anticipation of stricter controls.

Some analysts echoed their view, saying companies could increase export in the near future to offset the effect of government policies.

The government scrapped or lowered a range of export rebates in April to curtail mounting exports and curb excessive production.

The world's largest exporter of steel products, China exported more 20 million tons in the first four months, and some consulting firms estimate this year's exports at around 30 million tons.